DCIT, New Delhi V. M/s Shrey Infradevelopers Pvt. Ltd., New Delhi

ITA 6229/DEL/2015

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9095 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 24-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAKASH DUBEY
• Keywords: Unexplained expenditure; Business income; Period of limitation; Question of law; Accommodation entries; Assessment record; Reason to believe; Reassessment proceedings; Set aside
• Section: 143(3); 143(1); 143(2); 264; 13; 153C; 147; 148; 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI B BEN CH, NEW DELHI (THROUGH VIDEO CONFERENCING] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND MS. MADHUMITA ROY, JUDICIAL MEMBER ITA NO. 6229/DEL/2015 [A.Y 2010-11] THE DY. C.I.T VS. M/S SHREY INFRADEVELOPERS [P] L TD CENTRAL CIRCLE -18 2-D, MIG, DDA FLATS NEW DELHI GULABI BAGH, NEW DELHI PAN : AAKCS 4315 F CO NO. 468/DEL/2015 (A/O ITA NO. 6229/DEL/2015 [A.Y 2010-11]) M/S SHREY INFRADEVELOPERS [P] LTD VS. THE DY. C.I.T 2-D, MIG, DDA FLATS CIRCLE 27(2) GULABI BAGH, NEW DELHI NEW DELHI PAN : AAKCS 4315 F [APPELLANT] [RESPONDENT] DATE OF HEARING : 09.08.2021 DATE OF PRONOUNCEMENT : 09.08.2021 ASSESSEE BY : DR. RAKESH GUPTA, ADV SHRI SOMIL AGARWAL, ADV REVENUE BY : SHRI PRAKASH DUBEY , SR. DR 2 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER :- THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY T HE ASSESSEE ARE PREFERRED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] - 27, NEW DELHI DATED 28.09.2015 PERTAINI NG TO ASSESSMENT YEAR 2010-11 . 2. THE GRIEVANCE OF THE REVENUE READ AS UNDER: (1) THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS E RRED IN LAW AND ON FACTS OF THE CASE IN DELETING RS. 11,18,669/ - WHICH WAS ADDED TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF A S UNEXPLAINED EXPENDITURE. (2) THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN NOT DISCUSSING THE ISSU E AND FACTS OF UNEXPLAINED EXPENDITURE RAISED BY THE AO IN HIS ASS ESSMENT ORDER ON BASIS OF WHICH ADDITION OF RS. 11,18,669/- WAS M ADE. (3) THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING RS. 6,94,52,80 9/-WHICH WAS ADDED TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF A S UNEXPLAINED DEPOSITS. (4) THAT THE COMMISSIONER OF INCOME TAX(APPEAL) HAS ER RED IN LAW AND ON FACTS IN RELYING ON THE SUBMISSIONS FILED BY THE ASSESSEE WHICH WERE INADEQUATE, INCOMPLETE, NOT GENUINE, NOT RELIA BLE AND ALREADY REJECTED BY AO DURING THE ASSESSMENT STAGE. 3 (5) THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS BY NEITHER CONDUCTING HER OWN INDEPEND ENT AND EFFECTIVE INQUIRY NOR GIVING A DIRECTION AS PER SUB SECTION 4 OF SECTION 250, INCOME TAX ACT AND IGNORING HON HIE DE LHI HIGH COURTS JUDGMENT IN THE CASE OF THE COMMISSIONER O F INCOME TAX - II VS M/S JANSAMPARK ADVERTISING AND MARKETING (P) LTD. (6) (A) THE ORDER OF THE CIT(APPEALS) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS, (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DU RING THE COURSE OF THE HEARING OF THE APPEAL. 3. THE CROSS OBJECTIONS OF THE ASSESSEE READ AS UND ER: 1. ON THE FACTS AND IN LAW AND ON FACTS IN CONFIRMI NG THE ACTION OF LD. AO IN FRAMING IMPUGNED REASSESSMENT ORDER AND T HAT TOO WITHOUT ASSUMING JURISDICTION AS PER LAW AND WITHOU T COMPLYING THE MANDATORY CONDITIONS OF SECTION 147 TO 151 OF THE A CT. 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, AC TION OF LD. CIT(A) IN CONFIRMING THE ACTION OF LD. AO IN FRAMIN G IMPUGNED REASSESSMENT ORDER U/S 147/143(3) IS BEYOND JURISDI CTION, BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. IN ANY VIEW OF THE MATTER AND IN ANY CASE, IMPUGNE D ASSESSMENT ORDER COULD NOT HAVE BEEN PASSED UNDER THE LAW, MOR E SO WHEN ORIGINAL ASSESSMENT WAS ANNULLED. 4 4. THAT THE CROSS OBJECTOR CRAVES THE LEAVE TO ADD, A MEND, MODIFY, DELETE ANY OF THE GROUND(S) OF CROSS OBJECTION BEFO RE OR AT THE TIME OF HEARING. 4. SINCE THE ISSUES RAISED IN THE CROSS OBJECTIONS GO TO THE ROOT OF THE MATTER, THEREFORE, WE WILL FIRST ADJUDICATE THE CROSS OBJECTIONS OF THE ASSESSEE. 5. THE REPRESENTATIVES OF BOTH THE SIDES WERE HEARD AT LENGTH, THE CASE RECORDS CAREFULLY PERUSED. WE HAVE CAREFULLY P ERUSED THE RELEVANT DOCUMENTS OF THE PAPER BOOK IN LIGHT OF RULE 18(6) OF ITAT RULES. 6. ON A PERUSAL OF THE PAPER BOOK, WE FIND THAT ON IDENTICAL SET OF FACTS IN THE CASE OF M/S SAM PORTFOLIO PVT LTD IN A SSESSMENT YEAR 2008- 09, SIMILAR ORDER WAS FRAMED U/S 143(3) R.W.S 153C OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT'] ON 23.12.2011. THAT ORDER WAS CHALLENGED U/S 264 OF THE ACT BEFORE THE LD. CIT(A) AND THE LD. CIT(A) HAD DECLARED THE ASSESSMENT ORDER NULL A ND VOID. 5 7. PURSUANT TO THE ORDER OF THE LD. CIT, NOTICE U/S 148 OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE AND THE REA SONS WERE SUPPLIED. WE FIND THAT IN THE CASE IN HAND, SIMILA R ORDER WAS FRAMED U/S 143(3) R.W.S 153C OF THE ACT AND THE ORDER WAS CHALLENGED BEFORE THE LD. CIT U/S 264 OF THE ACT AND THE SAID ORDER H AS BEEN DECLARED NULL AND VOID. 8. IN THE CASE IN HAND, AGAIN PURSUANT TO THE ORDER OF THE LD. CIT U/S 264 OF THE ACT, NOTICE U/S 148 OF THE ACT WAS ISSUE D AND SERVED UPON THE ASSESSEE AND REASONS RECORDED FOR REOPENING THE ASSESSMENT ARE IDENTICAL TO THE REASONS RECORDED IN THE CASE OF M/ S SAM PORTFOLIO PVT LTD, THOUGH QUANTUM MAY DIFFER. 9. WE FURTHER FIND THAT THE QUARREL IN RELATION TO THE ASSESSMENT ORDER IN THE CASE OF M/S SAM PORTFOLIO PVT LTD TRAV ELLED UPTO THE TRIBUNAL AND THE TRIBUNAL IN ITA NO. 6218/DEL/2015 AND CO NO. 403/DEL/2015 VIDE ORDER DATED 20/02.2020 HAS ANNULL ED THE ASSESSMENT ORDER. 6 10. ON FINDING PARITY ON THE FACTS OF THE CASE IN H AND WITH THE FACTS OF THE CASE OF M/S SAM PORTFOLIO PVT LTD [SUPRA], W E HAVE NO HESITATION IN ADOPTING THE FINDINGS GIVEN BY THIS TRIBUNAL IN THE CASE OF M/S SAM PORTFOLIO PVT LTD [SUPRA]. THE RELEVANT FINDINGS I N THAT CASE OF THIS TRIBUNAL READ AS UNDER: 8. THIS ORDER OF THE CIT IS DATED 20.03.2014 AND S UBSEQUENT TO THIS ORDER THE AO ISSUED NOTICE U/S 148 OF THE ACT DATED 27.03.2014. THE REASONS FOR THE BELIEF THAT INCOME HAS ESCAPED ASSE SSMENT READ AS UNDER: 10. REASONS FOR THE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT:- THE ASSESSMENT OR THE YEAR UNDER CONSIDERATION WAS MADE U/S 143(3) R.W.S. 153C ON 23.12.2011 AS A TOTAL INCOME OF RS.8,60,27,610/- AS AGAINST RETURNED INCOME OF NIL. AGGRIEVED BY THE ABOVE ORDER, THE ASSESSEE FILED REVISION APPLIC ATION U/S 264 OF THE INCOME TAX ACT, 1961 BEFORE CIT, (CENTRAL)-II, NEW DELHI. THE ASSESSEE CHALLENGED ASSUMPTION OF JURISDICTION U/S 153C ON THE GROUNDS, THAT THE SATISFACTION ARRIVED BY THE A O IS NOT BASED ON DOCUMENTS FOUND AND SEIZED FROM THE PREMISES OF OTHER PERSON IN WHOM ACTION U/S 132 IS INITIATED. THE CIT, (CENT RAL)-II, NEW DELHI ANNULLED THE ASSESSMENT ORDER ON THE GROUND O F INCORRECT ASSUMPTION OF JURISDICTION U/S 153C. HOWEVER, THE L CIT(CENTRAL)- II, HAS NOT ADJUDICATED THE GROUND ON WHICH THE ADD ITIONS WERE MADE. THOUGH, THE ASSESSEE CHALLENGED THE ADDITIONS BUT NOT 7 SUBMISSIONS WERE FILED BEFORE THE LD CIT(CENTRAL)-I I, NEW DELHI AS TO WHY ADDITIONS BE DELETED. IN VIEW OF THE FACT , WHEREAS NO SUBMISSION IS MADE BY THE ASSESSEE IN RESPECT OF TH E MERITS ON WHICH ADDITIONS WERE MADE, IT CLEARLY SHOWS THAT TH E ASSESSEE HAD NOTHING TO SAY ON THESE GROUNDS. HOWEVER, AFTER PER USAL OF THE ASSESSMENT RECORDS OF THE CASE FOLLOWING ISSUES ARE FOUND- A) EXPENDITURE OF RS.1,05,654/- IS REQUIRED TO BE D ISALLOWED (EXCEPT THE STATUTORY AND OBLIGATORY EXPENSES OF RO C FILING FEE & AUDIT FEES) AS THE ASSESSEE HASNT SUBMITTED ANY EV IDENCE TO SUPPORT ITS CLAIM OF EXPENDITURES AND ESTABLISH ITS BUSINESS PURPOSE. HENCE, SUM TO THE TUNE OF RS.1,05,654/- HA S ESCAPED ASSESSMENT. B) FROM THE PERUSAL OF THE BANK STATEMENT IT WAS NO TICED THAT THERE ARE SOME CASH DEPOSITS IN THE BANK ACCOUNTS O F THE ASSESSEE FOR WHICH NO EXPLANATION AND/OR EVIDENCE HAS BEEN F ILED TO EXPLAIN THEIR SOURCE AND TO ESTABLISH THEIR SOURCE. HENCE, SUM TO THE TUNE OF RS.11,000/- IS REQUIRED TO BE TREATED AS UNEXPLA INED CASH DEPOSIT, WHICH HAS ESCAPED ASSESSMENT. C) THE ASSESSEE COMPANY HAD RECEIVED RS.42,00,000/- AS SHARE APPLICATION DURING THE ASSESSMENT YEAR. THE ASSESSE E HASNT FILED ANY DOCUMENTARY EVIDENCE TO ESTABLISH THE IDENTITY AND CAPACITY OF THE PERSONS WHO HAVE ALLEGEDLY GIVEN SHARE APPLI CATION MONEY OR TO ESTABLISH THE GENUINENESS OF THESE TRANSACTIONS. HENCE, SUM TO THE TUNE OF RS.42,00,000/- IS REQUIRED TO BE ADDED TO THE INCOME 8 AS IT HAS ESCAPED ASSESSMENT, ON PROTECTIVE BASIS I N INTEREST OF REVENUE. D) FROM PERUSAL OF THE BANK STATEMENTS AND OTHER DO CUMENTS IS ITS SEEN THAT THERE ARE UNEXPLAINED DEPOSITS OTHER THAN CASH TO THE TUNE OF RS.8,17,10,951/-. THESE DEPOSITS ARE UN EXPLAINED EVEN AFTER CONSIDERING THE UNEXPLAINED OTHER LIABILITIES , SHARE CAPITAL & SHARE PREMIUM. HENCE, SUM TO THE TUNE OF RS.8,17,10 ,951/- IS REQUIRED TO BE TREATED AS UNEXPLAINED OTHER DEPOSIT S, WHICH HAS ESCAPED ASSESSMENT ON PROTECTIVE BASIS IN INTEREST OF REVENUE. IT IS FURTHER STATED THAT ASSESSEE WAS DONE OF THE INT ERMEDIARY COMPANIES USED BY SHRI ASEEM KUMAR GUPTA FOR PROVID ING ACCOMMODATION ENTRIES AS ADMITTED BY SHRI ASEEM GUP TA. I, THEREFORE, HAVE REASONS TO BELIEVE THAT THIS AMOUNT OF RS.8,60,27,610/- REPRESENTS INCOME OF THE ASSESSEE CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT FOR A.Y. 2008-09. THE NECESSARY APPROVAL MAY KINDLY BE ACCORDED TO INITIA TE PROCEEDINGS U/S 147 OF THE INCOME TAX ACT, 1961 FOR THE A.Y. 20 08-09 IN VIEW OF THE PROVISION OF SECTION 151(1) OF THE INCOME TA X ACT, 1961. 9. IT CAN BE SEEN FROM THE ABOVE, THE AO HAS REFERR ED TO THE ISSUES WHICH WERE CONSIDERED IN THE ASSESSMENT ORDER DATED 23.12.2011 FRAMED U/S 143(3) R.W.S. 153C OF THE ACT. AS MENTIONED ELS EWHERE, THE SAID ASSESSMENT ORDER WAS DECLARED NULL AND VOID AND THU S BECAME NON-EST. THIS MEANS THAT EVERYTHING HAS GONE BACK TO THE STA GE OF THE RETURN OF INCOME AND, THEREFORE, THE AO SHOULD HAVE PROCEEDED FROM THE STAGE OF THE RETURN OF INCOME. 9 10. A CAREFUL READING OF THE AFORESAID NOTICE AND T HE REASONS FOR THE BELIEF THAT THE INCOME HAS ESCAPED ASSESSMENT CLEAR LY SHOW THAT THE AO WANTED TO PROCEED IN THE LIGHT OF THE PROVISIONS OF SECTION 151(1) OF THE ACT. THE PROVISION OF SECTION 151(1) OF THE ACT AT THE RELEVANT POINT OF TIME READ AS UNDER: 151. SANCTION FOR ISSUE OF NOTICE.- (1) IN A CASE WHERE AN ASSESSMENT UNDER SUB-SECTION (3) OF SECTION 143 OR SECTION 147 HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR, NO NOTICE SHALL BE ISSUED UNDER SECTION 148 BY AN ASSESSING OFFICER , WHO IS BELOW THE RANK OF ASSISTANT COMMISSIONER OR DEPUTY COMMIS SIONER, UNLESS THE JOINT COMMISSIONER IS SATISFIED ON THE R EASONS RECORDED BY SUCH ASSESSING OFFICER THAT IT IS A FIT CASE FOR THE ISSUE OF SUCH NOTICE: PROVIDED THAT, AFTER THE EXPI RY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, NO SU CH NOTICE SHALL BE ISSUED UNLESS THE PRINCIPAL CHIEF COMMISSIONER O R CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR COMMISSIO NER IS SATISFIED, ON THE REASONS RECORDED BY THE ASSESSING OFFICER AFORESAID, THAT IT IS A FIT CASE FOR THE ISSUE OF S UCH NOTICE. 11. XXX 12 XXX 13. MOREOVER, THE SAME REASONS HAVE BEEN GIVEN FOR REOPENING THE ASSESSMENT WHICH WERE USED FOR FRAMING THE ASSESSME NT U/S 143(3) R.W.S 153C OF THE ACT. THE HONBLE HIGH COURT OF PUNJAB A ND HARYANA IN THE 10 CASE OF SMT. ANCHI DEVI 218 CTR 0011 HAS HELD THAT AO CANNOT BE ALLOWED TO INITIATE FRESH REASSESSMENT PROCEEDINGS ON IDENTICAL FACTS WHERE THE FIRST REASSESSMENT PROCEEDINGS WERE QUASH ED BEING BARRED BY LIMITATION. THE RELEVANT FINDINGS OF THE HONBLE HI GH COURT READ AS UNDER: IT MAY BE SEEN THAT THE AO HAD NO FRESH MATERIAL B EFORE HIM. A PERUSAL OF THE REASONS RECORDED BY HIM FOR REOPENIN G THE ASSESSMENT PROCEEDINGS VIDE NOTICE DT. 22ND MARCH, 2004 SHOWS THAT THE SAME REASONS HAVE BEEN RECORDED WHICH WERE STATED IN THE EARLIER NOTICE SERVED UNDER SECTION 148 OF THE ACT ON THE BASIS OF WHICH THE ASSESSMENT WAS MADE ON 14TH FEB. , 2003 AND WHICH WAS QUASHED BEING BARRED BY LIMITATION. THUS, FROM THE FACTS ITSELF, IT IS CRYSTAL CLEAR THAT THOUGH THE P RESENT PROCEEDINGS WERE INITIATED BY THE AO WITHIN THE PRE SCRIBED PERIOD OF LIMITATION YET IT IS CLEAR THAT THE SAME WERE IN ITIATED ONLY TO CIRCUMVENT THE EARLIER ORDER OF THE TRIBUNAL VIDE W HICH THE ASSESSMENT DT. 14TH FEB., 2003 WAS HELD TO BE TIME- BARRED. THUS, THE AO CANNOT BE ALLOWED TO INITIATE FRESH PROCEEDI NGS ON IDENTICAL FACTS AS THE FIRST ASSESSMENT PROCEEDINGS HAD FAILED TO RESULT IN A VALID ASSESSMENT DUE TO LAPSE ON THE PA RT OF THE IT AUTHORITY. RESULTANTLY, THE APPEAL IS ALLOWED AND T HE ORDER OF THE TRIBUNAL IS SET ASIDE. 14. THE HONBLE HIGH COURT OF RAJASTHAN IN THE CASE OF M/S. RAMESHWAR PRASAD SHARMA IN ITA NO.642/2011 DATED 04 .09.2017 AT THE OCCASION TO CONSIDER INTER ALIA THE FOLLOWIN G SUBSTANTIAL QUESTION OF LAW. 11 1. WHETHER THE TRIBUNAL WAS LEGALLY JUSTIFIED IN R EVERSING THE FINDING OF CIT(A) AND ANNULLING THE REASSESSMENT U/ S 147 WHICH WAS DONE ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SURVEY AND NOT ON THE BASIS OF ANNULLED ASSESSMENT U/S 143(3)? 15. HONBLE HIGH COURT HELD AS UNDER : 11. AGAINST THIS ORDER, THE ASSESSEE PREFERRED APPE AL BEFORE LD. CIT(A). THE PROCEEDINGS INITIATED U/S 148 WERE ALSO CHALLENGED. THE LD. CIT(A) UPHOLD THE REOPENING OF THE ASSESSME NT. HOWEVER, APPEAL OF THE ASSESSEE ON MERIT WAS ALLOWED IN PART AS CERTAIN ADDITIONS WERE SUSTAINED I.E. TRADING ADDITION BY A PPLYING N.P. RATE AT 10.5% CONFIRMING THE ADDITION OF RS.3,25,000/- I N THE NAME OF SH. S.K. UPADHYAY AND NOT TREATING THE INTEREST ON FIXED DEPOSIT INCOME AS BUSINESS INCOME. THE REMAINING ADDITIONS WERE DELETED BY LD. CIT(A). 12. THE DEPARTMENT IS IN APPEAL AGAINST DELETING TH E ADDITIONS BY LD. CIT(A) AND ASSESSEE IS CHALLENGING CONFIRMING T HE REOPENING THE ASSESSMENT AND ADDITION ON ACCOUNT OF APPLYING N.P. RATE OF 10.5% AND ADDITION MADE IN THE NAME OF SH. S.K. UPA DHYAY AT RS.3,25,000/-. 14.1 ONCE AN ASSESSMENT HAS BEEN COMPLETED AND THE SAME WAS SUBJECT MATTER OF APPEAL, THEREFORE, IN OUR CONSIDE RED VIEW ON THE SAME ISSUE REASSESSMENT CANNOT BE FRAMED AFTER ISSU ING NOTICE U/S 148. NOTICE U/S 143(2) WAS NOT ISSUED IN TIME, THEREFORE, THE 12 ASSESSMENT WAS ANNULLED AND THIS ACTION OF THE LD. CIT(A) HAS BEEN ACCEPTED BY THE DEPARTMENT AS NO SECOND APPEAL HAS BEEN PREFERRED AGAINST THE ORDER OF LD. CIT(A). NOW TAKI NG A RECOURSE OF REOPENING OF THE ASSESSMENT CANNOT BE PERMITTED EITHER IN THE EYES OF LAW OR IN THE FACTS OF THE PRESENT CASE. LA NGUAGE OF PROVISIONS OF SECTION 147 WHICH PROVIDES:- IF THE AO HAS REASON TO BELIEVE THAT ANY INCOME CH ARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO PROVISIONS OF SECTION 148 TO 153, ASSESS OR REASSES S SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPE D ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURS E OF PROCEEDINGS UNDER THIS SECTION OR RECOMPUTE THE LOSS OR THE DEP RECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY BE, FOR THE AS SESSMENT YEAR CONCERNED. IT HAS BEEN FURTHER PROVIDED THAT NO ASSESSMENT COM PLETED U/S 143(3) CAN BE REOPENED AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS ANY SUCH INCOME HAS ESCAPED ASSESSMENT BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO MA KE A RETURN U/S 139(1). IT IS FURTHER PROVIDED THAT AO MAY ASSESS OR REASSE SS SUCH INCOME OTHER THAN INCOME INVOLVING MATTERS WHICH ARE SUBJECT MAT TER OF ANY APPEAL, REFERENCE OR REVISION WHICH IS CHARGEABLE TO TAX AN D HAS ESCAPED ASSESSMENT. AFTER ANALYZING THE PROVISIONS OF SECTI ON 147, WE ARE OF THE VIEW THAT THERE WAS NO MATERIAL WITH THE AO TO HOLD ANY INCOME HAS ESCAPED ASSESSMENT. ORIGINAL RETURN WAS FILED U/S 1 39(1) WHICH WAS SUBJECT MATTER OF SCRUTINY ASSESSMENT AND ASSESSMEN T U/S 143(3) WAS COMPLETED. HUGE ADDITIONS WERE MADE, THEY WERE CHAL LENGED BEFORE LD. 13 CIT(A) AND ON LEGAL POINT IT WAS FOUND THAT THE ASS ESSMENT COMPLETED BY ISSUING NOTICE U/S 143(2) ISSUED WAS BARRED BY LIMI TATION. SINCE, THE FIRST ASSESSMENT WAS SUBJECT MATTER OF APPEAL BEFORE APPE LLATE AUTHORITY, THEREFORE, ON THE SAME ISSUE WHEN IT WAS FOUND THAT ASSESSMENT HAS BEEN ANNULLED IT CANNOT BE A SUBJECT MATTER OF REOPENING OF THE ASSESSMENT. THEE MUST BE SOME FRESH MATERIAL OR NEW INFORMATION WHICH AUTHORIZES THE AO TO ISSUE NOTICE U/S 148. THERE ARE SO MANY C ASES WHEN RETURN HAD BEEN FILED BY THE RESPECTIVE ASSESSEE HAS BEEN ACCE PTED U/S 143(1) ON THE SAME MATERIAL. NO NOTICE U/S 148 CAN BE ISSUED AS HELD BY VARIOUS COURTS. THERE MUST BE REASON TO BELIEVE AND THERE M UST BE SOME MATERIAL BEFORE AO TO HOLD THAT ANY PART OF INCOME HAS ESCAP ED ASSESSMENT. 15. IN THE PRESENT CASE THERE WAS NO FRESH MATERIAL AT ALL. THE MATERIAL WHICH WAS AVAILABLE BEFORE THE AO WAS ONLY ORIGINAL ASSESSMENT ORDER WHICH WAS ANNULLED. ONCE AN ASSESSMENT HAS BEEN ANN ULLED THEN DEPARTMENT CANNOT ADOPT A RECOURSE TO CORRET THEIR MISTAKE COMMITTED ORIGINALLY NOT ISSUING NOTICE U/S 143(2) IN TIME. 23. AGAIN SUCH FACTS ARE NOT IN THE CASE IN HAND AS THE REASON WERE RECORDED ON THE BASIS OF ANNULLED ASSESSMENT ONLY. THEREFORE, THE RATIO OF THIS DECISION IS ALSO NOT APPLICABLE ON THE FACT S OF THE PRESENT CASE. 24. FEW MORE CASES ON WHICH RELIANCE HAS BEEN PLACE D BY LD. D/R I.E. IN CASE OF RAYMOND WOOLLEN MILLS LTD. VS. ITO 236 ITR 34 (SC), CLAGGAT BRACHI CO. LTD. VS. CIT 177 ITR 409 (SC) AND KALYAN MAVJI AND CO. VS. CIT 102 ITR 287 (SC). IN ALL THESE CASES CERTAIN IN FORMATION WAS RECEIVED DURING THE ASSESSMENT PROCEEDINGS AND, THE REFORE, NOTICE U/S WAS ISSUED AND HELD AS VALID. HOWEVER, IN THE PRESE NT CASE NO SUCH FACTS 14 ARE INVOLVED AS NO INFORMATION WAS RECEIVED DURING THE ASSESSMENT PROCEEDINGS. WE HAVE ALSO SEEN VARIOUS OTHER CASE L AWS ON WHICH RELIANCE HAS BEEN PLACED BY LD. D/R AND FOUND THAT THESE CAS ES ARE ALSO DISTINGUISHABLE. 25. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AN D IN VIEW OF THE DIRECT DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF BABU LAL LATH (SUPRA), WE HOLD THAT REASSESSMENT COMPLETED W AS AB INITIO VOID AND LIABLE TO BE ANNULLED. ACCORDINGLY THE SAME IS ANNU LLED. 6. WE HAVE HEARD BOTH THE SIDES. 7. BEFORE PROCEEDING WITH THE MATTER, IT WILL NOT B E OUT OF PLACE TO MENTION THAT THE JUDGMENT WHICH SOUGHT TO BE RELIED UPON BY THE TRIBUNAL IN THE CASE OF BABULAL LATH (SUPRA) HAS NOT BEEN DI LUTED BY ANY OTHER COURT. (16 OF 16) [ITA-642/2011] 8. APART FROM THAT TRIBUNAL WHILE CONSIDERING THE M ATTER HAS GIVEN REASON IN PARA NO.23-24, AFTER TAKING INTO CONSIDERATION, THE SUPREME COURT DECISION IN RAYMOND WOOLEN MILLS LTD. VS. ITO, 236 ITR 34 (SC), CLAGGAT BRACHI CO. LTD. VS. CIT 177 ITR 409 (SC) AND KALYAN MAVJI & CO. VS. CIT 102 ITR 287 (SC) WHICH WAS RELIED UPON BY THE MUMBA I TRIBUNAL IN BABULAL LATH (SUPRA). 9. IN THAT VIEW OF THE MATTER, WE ARE OF THE CONSID ERED OPINION THE TRIBUNAL HAS RIGHTLY HELD THAT THE MATTER OF REASSE SSMENT U/S 147 WAS DONE ON THE BASIS OF MATERIAL FOUND DURING SURVEY S UBSEQUENT TO ASSESSMENT ON 18.3.03. THEREFORE, WE ARE OF THE OPI NION THAT TRIBUNAL 15 RIGHTLY DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND FIRST ISSUE IS REQUIRED TO BE ANSWERED IN FAVOUR OF THE ASSESSEE. WITH REGARD TO SECOND ISSUE IN VIEW OF FINDING ON ISSUE NO.1, THIS ISSUE IS ALSO ANSWERED IN FAVOUR OF THE ASSESSEE. 16. THE COORDINATE BENCH IN THE CASE OF BABULAL LAT H IN ITA NO.3532/BOM/1994, 83 ITD 0691 HAS HELD AS UNDER: THE ORIGINAL ASSESSMENT HAD TO BE QUASHED BY CIT(A ) AS THE PROCEEDINGS BY WAY OF ISSUE OF NOTICE UNDER SECTION 143(2) WERE INITIATED BEYOND TIME. THE REASSESSMENT PROCEEDING UNDER SECTION 147 WAS INITIATED BY THE AO AND THE TOTAL INCOME WA S ASSESSED AT RS. 21,15,040 AS WAS DETERMINED IN THE ORIGINAL ASS ESSMENT. THUS, IT APPEARS THAT REASSESSMENT PROCEEDING WAS INITIAT ED NOT BECAUSE ANY INCOME HAD ESCAPED ASSESSMENT TO TAX BUT TO CIR CUMVENT THE TIME-BARRED ASSESSMENT. THUS, THE REASSESSMENT PROC EEDING UNDER SECTION 147 AMOUNTS TO EXTENDING THE LIMITATI ON WHICH THE AO IS NOT EMPOWERED TO. IT IS TRITE LAW THAT LIMITA TION PERIOD UNDER SECTION 143 CANNOT BE EXTENDED BY AN IT AUTHO RITY AND IT IS ALSO QUITE RECOGNISED PRINCIPLE OF LAW THAT AN ACT, WHICH CANNOT BE DONE BY AN AUTHORITY DIRECTLY, CANNOT BE DONE INDIR ECTLY BY HIM. FACT THAT THE RETURN WAS PENDING FOR DISPOSAL CANNO T CONSTITUTE A VALID REASON FOR REOPENING THE ASSESSMENT, EVEN UND ER THE AMENDED S. 147. THOUGH S. 147, AFTER THE AMENDMENT, HAS WIDENED THE POWERS OF THE AO TO REOPEN THE ASSESSMENT, STIL L THERE IS INTRINSIC EVIDENCE IN THE SECTION ITSELF TO SHOW TH AT CASES WHERE RETURNS VALIDLY FILED HAVE NOT BEEN DISPOSED OF, HA VE NOT BEEN BROUGHT UNDER THE NET OF THE SECTION. THIS IS DEAR FROM EXPLN. 16 2(B) WHICH SAYS THAT FOR THE PURPOSE OF THE SECTION , A CASE WHERE A RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESS EE, BUT NO ASSESSMENT HAS BEEN MADE, IS TO BE DEEMED AS A CASE WHERE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, BU T ONLY IF IT IS NOTICED BY THE AO THAT THE ASSESSEE HAS UNDERSTATED THE INCOME OR CLAIMED EXCESSIVE LOSS, DEDUCTION, ETC. IN THE R ETURN. THUS, THOUGH UNDER THE NEW S. 147, THE AO CAN ISSUE A NOT ICE OF REASSESSMENT, EVEN WHERE A VALID RETURN FILED BY TH E ASSESSEE HAS NOT BEEN DISPOSED OF, THE POWER IS HEDGED IN BY A C ONDITION THAT THERE SHOULD BE A FINDING THAT INCOME HAS BEEN UNDE RSTATED IN THE RETURN OR THE ASSESSEE HAS CLAIMED EXCESSIVE LOSS, DEDUCTION, ETC. THEREIN. THERE IS NO SUCH FINDING IN THE PRESENT CA SE. ON THE OTHER HAND, BY FRAMING AN ILLEGAL ASSESSMENT UNDER S. 143 (3), WHICH WAS QUASHED BY CIT(A), IT CANNOT BE SAID THAT THE AO HA S UNEARTHED UNDERSTATEMENT OF INCOME OR EXCESSIVE CLAIM, ETC. I N THE RETURN. IN FACT, IT IS NOT THE CASE OF THE AO THAT EXPLN. 2 (B) IS INVOKED. IN THE ABSENCE OF ANY SUCH FINDING, THE PENDENCY OF TH E RETURN FILED BY THE ASSESSEE PLACES A FETTER UPON THE POWER OF T HE AO TO REOPEN THE ASSESSMENT. THE INTIMATION UNDER S. 143( L)(A) IF AT ALL ISSUED CANNOT BE EQUATED TO AN ASSESSMENT AND, THER EFORE, FOR THE PURPOSE OF THE SECTION, THE RETURN COULD BE CONSIDE RED TO BE ITA NO.6218/DEL/2015 & CO NO.403/DEL/2015 PENDING WHEN THE AO ISSUED THE NOTICE UNDER S. 148. THE MERE PENDENCY O F THE RETURN CANNOT CONSTITUTE 'REASON TO BELIEVE' WITHIN THE ME ANING OF SECTION 147. THEREFORE, THE PROCEEDINGS UNDER S. 14 7 WERE INITIATED TO CIRCUMVENT THE TIME BARRED ASSESSMENT [WHICH WAS QUASHED BY CIT(A)] AND HENCE THEY ARE ILLEGAL WITHO UT JURISDICTION AND BAD IN LAW. AS THE REASSESSMENT WAS VOID AB ANI TIO, ANY ADDITIONS MADE BY THE AO AND SUSTAINED BY THE CIT(A ) IN THAT ASSESSMENT AUTOMATICALLY STANDS DELETED. 17 17. THE COORDINATE BENCH OF CHENNAI IN THE CASE OF JAYA PUBLICATIONS 123 ITD 0053 HAS HELD AS UNDER: THE CIT(A) HAS SET ASIDE THE ASSESSMENT WHICH MEAN S THAT HE ANNULLED THE ASSESSMENT, SINCE HE HAS NOT GIVEN ANY DIRECTION TO REDO THE ASSESSMENT. AS SUCH, THE AO AS NO JURISDIC TION TO PASS ANY FURTHER ORDER. HE IS DUTY-BOUND TO FOLLOW THE D IRECTION OF THE CIT(A) AND HE CANNOT SIT OVER THE ORDER OF THE CIT( A), WHO IS A SUPERIOR AUTHORITY. THE REMEDY LIES WITH THE DEPART MENT AND HE HAS TO FILE AN APPEAL AGAINST THE ORDER OF THE CIT( A) IF THEY HAVE ANY GRIEVANCE. IN THE PRESENT CASE, INSTEAD OF FILI NG THE APPEAL IN TIME AGAINST THE CIT(A)S ORDER THE AO MADE A FRESH ASSESSMENT WITHOUT JURISDICTION AND WHICH IS AGAINST THE LAW O N THE FACTS OF THE CASE AND NOT SUSTAINABLE IN THE EYES OF LAW.-FU SHEEN TANNERY & ANR. VS. ITO (2003) 185 CTR (CAT) 76 : (2003) 262 ITR 456 (CAL) RELIED ON 18. CONSIDERING THE FACTS OF THE CASE IN HAND IN TO TALITY AS EXPLAINED HEREINABOVE IN THE LIGHT OF THE PLETHORA OF JUDICIA L DECISION DISCUSSED HEREINABOVE. WE ARE OF THE CONSIDERED VIEW THAT THE AO HAS WRONGLY ASSUMED JURISDICTION IN FRAMING THE ASSESSMENT ORDE R DATED 02.03.2015 U/S 143(3) R.W.S 147 OF THE ACT AND SUCH ORDER DESE RVES TO BE SET ASIDE. SINCE WE HAVE QUASHED THE ASSESSMENT ORDER ON THE P OINT OF LAW, WE DO NOT FIND IT NECESSARY TO DWELL INTO THE MERITS O F THE CASE. ACCORDINGLY, THE CROSS OBJECTION IS ALLOWED. 18 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IN ITA NO. 6229/DEL/2015 IS DISMISSED WHEREAS THE CROSS OBJECT ION OF THE ASSESSEE IN CO NO. 468/DEL/2015 IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 09.08. 2021 IN THE PRESENCE OF BOTH THE RIVAL REPRESENTATIVES. SD/- SD/- [MADHUMITA ROY] [N.K. BI LLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 09 TH AUGUST, 2021 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI 19 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER