DEVANG P. SONI, MUMBAI V. CIT 17, MUMBAI

ITA 6153/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83570 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 17-06-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 08-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DINESH R SHAH
• Keywords: Reopening of assessment
• Section: 143(3); 263

Judgement Text

D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./ I.T.A. NO.6153 /MUM/2012 ( / ASSESSMENT YEAR : 2009-2010 SHRI DEVANG P. SONI, PROP. OF M/S D.J. FURNISHERS, 14, SAMRAT SILK MILL COMPOUND, NEAR GODREJ PETROL PUMP, L.B.S. ROAD, VIKHROLI (WEST), MUMBAI 400 079. / VS. THE COMMISSIONER OF INCOME TAX CITY -17, 4 TH FLOOR, PIRAMAL CHAMBER, DR. B.A. ROAD, LALBAUG, PAREL, MUMBAI 400 012. ./ PAN : AREPS5967P ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SHRI DINESH R. SHAH R E SPONDENT BY : SHRI SANTOSH KUMAR / DATE OF HEARING : 17-06-2014 / DATE OF PRONOUNCEMENT : 20-08-2014 [ / O R D E R PER SANJAY GARG, JUDICIAL MEMBER : %, THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF LD. CIT - 17, MUMBAI DATED 31-8-2012 RELEV ANT TO A.Y. 2009-10. 2. THE ASSESSEE THROUGH HIS GROUNDS OF APPEAL HAS C ONTESTED THE ACTION OF THE LD. COMMISSIONER OF INCOME TAX IN SETTING ASIDE THE ORDER OF A.O. PASSED U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 B Y WAY OF INVOKING THE PROVISIONS OF SECTION 263 OF THE INCOME TAX ACT. ITA 6153/M/12 2 3. BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF I NCOME FILED BY THE ASSESSE WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER, TH E A.O. NOTICED THAT THERE WAS NON-RECONCILIATION OF TDS RECEIPTS. HE, THEREFO RE, REOPENED THE ASSESSMENT U/S 147 OF THE ACT. THE ASSESSEE RECONC ILED THE RECEIPTS WHICH WAS ACCEPTED BY THE A.O. AND THE INCOME OF THE ASSE SSEE WAS ACCORDINGLY ACCEPTED BY THE A.O. WITHOUT VARIATION IN THIS RESP ECT. THEREAFTER, THE LD. CIT BY INVOKING THE PROVISIONS OF SECTION 263 OF THE AC T, SET ASIDE THE ASSESSMENT HOLDING THAT THE A.O. HAD NOT CONDUCTED PROPER ENQU IRIES RELEVANT TO DETERMINATION OF ASSESSABLE INCOME IN RELATION TO S EVERAL ISSUES AND DIRECTED HIM TO EXAMINE VARIOUS ISSUES AFRESH AS HAD BEEN DI SCUSSED BY HIM IN THE IMPUGNED ORDER PASSED U/S 263 OF THE ACT. THE ASSE SSEE IS THUS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE LD. R EPRESENTATIVES OF BOTH THE PARTIES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE LD. CIT HAS SET ASIDE THE ASSESSMEN T BY INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT IN RELATION TO THE REOPENED ASSESSMENT U/S 147 OF THE ACT. WE MAY OBSERVE THAT THE SCOPE OF THE A.O. TO ASSESS THE INCOME U/S 147 OF THE ACT IS LIMITED ON THE GROUND THAT THERE SHOULD BE A REASON FOR THE A.O. TO BELIEVE THAT THE INCOME OF T HE ASSESSEE HAS ESCAPED ASSESSMENT. THE A.O. HAS TO SET OUT THE REASONS FO R HIS SAID BELIEF. IF THE A.O. ULTIMATELY FOUND THAT THE REASONS FOR WHICH TH E ASSESSMENT WAS REOPENED WERE NOT ENOUGH FOR ANY ADDITION AND THE A SSESSEE HAD BEEN ABLE TO EXPLAIN THE QUERIES RAISED BY THE A.O. IN RELATION TO SUCH REASONS OR BELIEF, THEN THE ADDITIONS CANNOT BE MADE ON ANY OTHER ISSU E. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. JE T AIRWAYS (2011) 239 CTR (BOM) 183 HAS CATEGORICALLY HELD THAT THE A.O. MAY ASSESS OR REASSESS THE INCOME IN RESPECT OF ANY ISSUE WHICH COMES TO HIS N OTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS THOUGH THE REASONS FOR SU CH ISSUE WERE NOT ITA 6153/M/12 3 INCLUDED IN THE NOTICE, HOWEVER, IF AFTER ISSUING A NOTICE UNDER SECTION 148, THE AO ACCEPTED THE CONTENTION OF THE ASSESSEE AND HOLDS THAT THE INCOME ABOUT WHICH HE HAS INITIALLY FORMED A REASON TO BEL IEVE HAD ESCAPED ASSESSMENT, HAS AS A MATTER OF FACT NOT ESCAPED ASS ESSMENT, IT IS NOT OPEN TO HIM INDEPENDENTLY TO ASSESS SOME OTHER INCOME. SIM ILAR VIEW HAS BEEN TAKEN BY THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF .CIT VS. SHRI RAM SINGH, (2008) 217 CTR (RAJ.) 345. 5. NOW IN THE CASE IN HAND, THE LD. CIT CANNOT BE S AID TO HAVE JURISDICTION TO SET ASIDE THE ASSESSMENT ORDER OF THE A.O. U/S 1 47 OF THE ACT IN RELATION TO THE ISSUES WHICH DID NOT FORM PART OF THE REASONS R ECORDED BY THE A.O. FOR REOPENING OF ASSESSMENT BECAUSE, THE A.O. HIMSELF H AD NO JURISDICTION TO MAKE ADDITIONS ON THOSE ISSUES. THE LD. CIT COULD N OT HAVE EXERCISED HIS JURISDICTION HOLDING THAT THE A.O. HAD FAILED TO MA KE PROPER ENQUIRIES IN RESPECT OF THE INCOME OF THE ASSESSEE ON VARIOUS IS SUES, WHEN THE A.O. HAD NO JURISDICTION TO MAKE SUCH ADDITIONS FOR THE REOPENE D ASSESSMENT PROCEEDINGS. UNDER SUCH CIRCUMSTANCES, THE ACTION OF THE LD. CIT IN SETTING ASIDE THE ASSESSMENT ORDER PASSED U/S 147 OF THE ACT IN RELAT ION TO OTHER ISSUES ON WHICH THE A.O. HAD NO JURISDICTION TO MAKE ADDITION U/S 147 OF THE ACT WAS BEYOND HIS JURISDICTION. RELIANCE IN THIS RESPECT H AS BEEN PLACED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE O F CIT VS. SOFTWARE CONSULTANTS, (2012) 341 ITR 240 (DEL.) IN VIEW OF O UR ABOVE OBSERVATIONS, IT IS HELD THAT THE ACTION OF THE LD. CIT, IN INVOKING TH E PROVISIONS OF SECTION 263 IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WAS NOT LE GALLY CORRECT. HENCE, THE ORDER OF LD. CIT IS SET ASIDE AND THE ORDER OF THE A.O. DATED 30-11-2011 PASSED U/S 143(3) R.W.S. 147 OF THE ACT IS HEREBY R ESTORED AND UPHELD. ACCORDINGLY, THE APPEAL FILED BY THE ASSESSEE IS AL LOWED. ITA 6153/M/12 4 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20-08 -2014. ' ) * 20-08-2014 - SD/- SD/- (B.R. BASKARAN) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; * DATED 20-08-2014 [ .8../ RK , SR. PS # $&' (' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 9 () / THE CIT 17,, MUMBAI 4. 9 / CIT JCIT RANGE 17(3),MUMBAI 5. < 88> , > , / DR, ITAT, MUMBAI D BENCH 6. % / GUARD FILE. / BY ORDER, < 8 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI