M/s. Prem Colour Chem Pvt. Ltd., Delhi V. ITO, New Delhi

ITA 6513/DEL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5107 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 13-06-2017
• Assessment Year: 2001-2002
• Appeal Filed On: 06-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Assessee Lawyers: RAKESH JAIN
• Keywords: Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3); 142(1); 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH SMC : NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 6513/DEL/2013 ASSESSMENT YEAR: 2001-02 PREM COLOUR CHEM PVT. LTD. VS ITO, WARD 14(3), 2210/10, AGGARWAL MARKET, NEW DELHI KATRA TOBACCO, TILAK BAZAR, DELHI 110 006 (PAN: AAACP0231F) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. RAKESH JAIN, ADV. & SH. GURJEE T SINGH, CA REVENUE BY : SH. T. VASANTHAN, SR. DR ORDER THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDE R OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XVII, NEW DELH I ON THE FOLLOWING GROUNDS:- 1. BECAUSE THE ACTION IS BEING CHALLENGED ON FACTS AND LAW FOR THE INITIATION, CONTINUATION AND CONCLUSION OF THE REASSESSMENT PROCEEDINGS U/S. 147 R.W. 148 OF THE ACT NEVERTHELESS, THERE BEING A FUNDAMENTAL AND FOUNDATIONAL DEFECT IN THE SERVICE AND COMMUNICATION OF NOTICE U/S. 148 & 143(2), 142(1) OF THE ACT. 2. BECAUSE THE ACTION FOR CONCLUDING THE REASSESSMENT IS BEING CHALLENGED SINCE THE' APPROVAL' HAS NOT 2 BEEN TAKEN FROM DESIGNATED AUTHORITY & IS IN VIOLATION OF SECTION 151(2) AND ADDITIONALLY THE SANCTIONING AUTHORITY IS NOT HAVING THE 'CHARGE' OVER THE 'RECORDS' WHILE GRANTING THE SAID APPROVAL . 3. BECAUSE THE ACTION IS BEING CHALLENGED ON FACTS AND LAW , SINCE INITIATION IS UNWARRANTED BEING BEYOND LIMITATION AS PRESCRIBED U/S 147 PROVISO & EVEN OTHERWISE BEING A CASE OF CHANGE OF OPINION WHILE SCRUTINY ASSESSMENT COMPLETED U/ S 143(3) THROUGH ORDER DT 02.05.2003. 4. BECAUSE THE ACTION IS BEING CHALLENGED ON FACTS AND LAW FOR UPHOLDING THE ADDITION OF RS. 5,00,000/- NEVERTHELESS THE IDENTITY, EXISTENCE OF THE PAYER I S AN ACCEPTED FACT AND NO EVIDENCE DIRECT OR INFERENTIAL BROUGHT ON RECORD TO CONTRADICT THE CONTENTIONS OF THE APPELLANT. PRAYER FOR ANY CONSEQUENTIAL RELIEF AND/ OR LEGAL CLAIM ARISING OUT OF THIS APPEAL AND FOR ANY ADDITION, DELETION, AMENDMENT AND MODIFICATION IN THE GROUNDS OF APPEAL BEFORE THE DISPOSAL OF THE SAME IN THE INTEREST OF SUBSTANTIAL JUSTICE TO THE ASSESSEE. 3 JUSTICE TO THE ASSESSEE. 2. THE BRIEF FACTS OF THE CASE ARE THAT AN INFORMA TION WAS RECEIVED FROM DIRECTORATE OF INVESTIGATION, NEW DEL HI THAT THE ASSESSEE HAD RECEIVED ACCOMMODATION ENTRY OF RS.5,0 0,000/- FROM M/S CHINTPURNI CREDITS. ACCORDINGLY A NOTICE U/S 14 8 OF THE INCOME TAX ACT, 1961 DATED 13.03.2008 WAS ISSUED BY THE A O. THE ASSESSE MADE NO COMPLIANCE IN RESPONSE TO THIS NOTICE. AGAI N A NOTICE U/S 142(1) OF THE ACT WAS ISSUED ON 08.08.2008 WHICH RE MAINED UN- COMPLIED WITH. NOTICE U/S 142(1) OF THE ACT DATED 2 9.06.2008, 12.11.2008 AND 26.11.2008 TOO WERE NOT COMPLIED WIT H. NOTICE U/S 142(1) WERE ISSUED AT THE ADDRESSES GP-30, PITAM PU RA, DELHI, 1657/35, NAI WALA, KAROL BAGH, NEW DELHI AND AT 221 0/10, AGGARWAL MARKET, KATRA TAMBAKO, TILAK BAZAR, DELHI. THE FIN AL NOTICE ALONGWITH SHOW CAUSE / QUESTIONNAIRE AT THE THIRD A DDRESS WAS SERVED UPON THE ASSESSEE. NOTICE WAS ALSO SERVED BY AFFIXTURE AT THE FIRST TWO ADDRESSES. SINCE THE PROCEEDINGS WERE BAR RED BY LIMITATION AND THE ASSESSEE WAS NOT RESPONDING TO THE NOTICES ISSUED IN THE CASE WAS DECIDED BY THE AO ON MERITS U/S. 144 OF TH E ACT ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND ADDITION OF RS. 5 LACS WAS MADE TO THE INCOME OF THE ASSESSEE, AS INCOME OF TH E ASSESSEE COMPANY FROM UNDISCLOSED SOURCES. THEREAFTER, THE A SSESSMENT WAS ASSESSED AT RS. 5,76,625/- U/S. 144 OF THE I.T. ACT , 1961 VIDE ORDER DATED 15.12.2008. AGAINST THE ASSESSMENT ORDER DATE D 15.12.2008, 4 ASSESSEE APPEALED BEFORE THE LD. CTI(A), WHO VIDE H IS IMPUGNED ORDER DATED 10.9.2013 HAS DISMISSED THE APPEAL OF THE ASSESSEE AND AFFIRMED THE ADDITION IN DISPUTE. 3. AGGRIEVED WITH THE LD. CIT(A)S ORDER DATED 10.9 .2013, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE STATED THAT ASSESSEE HAS RAISED SO MANY GROUNDS, BUT ARGUED ONL Y THE GROUND NO. 3 IN WHICH HE HAS STATED THAT THE AO HAS COMPLE TED THE ASSESSMENT U/S. 144/147 OF THE I.T. ACT, 1961, AFTE R MAKING THE DETAILED ENQUIRY ABOUT THE ACCOMMODATION ENTRY OF R S. 5 LACS FROM M/S CHINTPURNI CREDITS. ASSESSEE HAS ALSO FILED ALL THE NECESSARY EVIDENCES BEFORE THE AO AT THE TIME OF COMPLETING T HE ASSESSMENT AND THE AO HAS ACCEPTED THE VERSION OF THE ASSESSEE AS WELL AS THE EVIDENCES FILED BY THE ASSESSEE BEFORE HIM. BUT AG AIN IN THE CASE OF THE ASSESSEE, THE AO HAS ISSUED THE NOTICE U/S. 148 OF THE ACT ON THE SAME ISSUE AND MADE THE ADDITION OF RS. 5 LACS BY P ASSING THE ASSESSMENT U/S. 147 OF THE I.T. ACT AND ONLY BY WA Y OF CHANGE OF OPINION AND SIMILARLY, THE LD. CIT(A) IN THE APPEAL FILED BY THE ASSESSEE HAS UPHELD THE ORDER OF THE AO BY DISMISSI NG THE APPEAL FILED BY THE ASSESSEE. LD. COUNSEL OF THE ASSESSEE DRAW MY ATTENTION TOWARDS THE ASSESSMENT ORDER AS WELL AS IMPUGNED OR DER AND THE ORDER OF THE HONBLE DELHI HIGH COURT IN THE CASE O F ALLIED STRIPS LIMITED VS. ACIT 384 ITR 0424 (DELHI) AND STATED TH AT THE ISSUE IN DISPUTE IS SQUARELY COVERED BY THE SAID DECISION, A S AFORESAID. HENCE, 5 HE REQUESTED THAT BY FOLLOWING THE AFORESAID JUDGME NT OF THE HONBLE HIGH COURT, THE LEGAL ISSUE MAY BE DECIDED IN FAVOU R OF THE ASSESSEE. 5. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS. I HAVE GONE THROUGH THE ORDER PASSED BY THE REVENUE AUTHOR ITIES AS WELL AS THE CONTENTION RAISED BY THE ASSESSEE IN THE GROUN DS OF APPEAL AND ALSO THE DECISION OF THE HONBLE DELHI HIGH COURT I N THE CASE OF ALLIED STRIPS LIMITED VS. ACIT 384 ITR 0424 (DELHI). I FIN D THAT ASSESSEE HAS RAISED SO MANY GROUNDS, BUT LD. COUNSEL OF THE ASSESSEE HAS ONLY ARGUED THE GROUND NO. 3 AND STATED THAT THE A O HAS COMPLETED THE ASSESSMENT U/S. 144/147 OF THE I.T. ACT, 1961, AFTER MAKING THE DETAILED ENQUIRY ABOUT THE ACCOMMODATION ENTRY OF R S. 5 LACS FROM M/S CHINTPURNI CREDITS. ASSESSEE HAS ALSO FILED ALL THE NECESSARY EVIDENCES BEFORE THE AO AT THE TIME OF COMPLETING T HE ASSESSMENT AND THE AO HAS ACCEPTED THE VERSION OF THE ASSESSEE AS WELL AS THE EVIDENCES FILED BY THE ASSESSEE BEFORE HIM. BUT AG AIN IN THE CASE OF THE ASSESSEE, THE AO HAS ISSUED THE NOTICE U/S. 148 OF THE ACT ON THE SAME ISSUE AND MADE THE ADDITION OF RS. 5 LACS BY P ASSING THE ASSESSMENT U/S. 147 OF THE I.T. ACT AND WHICH IS A CHANGE OF OPINION AND SIMILARLY, THE LD. CIT(A) IN THE APPEAL FILED B Y THE ASSESSEE HAS UPHELD THE ORDER OF THE AO BY DISMISSING THE APPEAL FILED BY THE ASSESSEE. I FIND THAT ON SIMILAR AND IDENTICAL FACT S AND CIRCUMSTANCES OF THE CASE, THE HONBLE DELHI HIGH COURT IN THE C ASE OF ALLIED STRIPS 6 LIMITED VS. ACIT 384 ITR 0424 (DELHI) HAS OBSERVED AS UNDER (HEADS NOTES):- REASSESSMENT-ISSUE OF NOTICE OF REASSESSMENT-CHANGE OF OPINION - ORIGINAL ASSESSMENT U/S 143(3) WAS COMPLETED ON 07.10.2009-RETURN OF INCOME WAS FILED ON 16.11.2007-PERUSAL OF QUESTIONNAIRE ALONG WITH RESPONSE FURNISHED AND AO AFTER EXAMINING ASPECT OF SHARE APPLICATION MONEY FRAMED ASSESSMENT U/S 143 (3)-RETURNED INCOME WAS ACCEPTED AND NO ADDITION WAS MADE ON ACCOUNT OF SHARE APPLICATION MONEY- AO ISSUED NOTICE U/S 148 TO ASSESSEE FOR REASSESSMENT ON GROUND THAT INCOME OF ASSESSEE HAD ESCAPED ASSESSMENT-ASSESSEE CHALLENGED NOTICE ISSUED U/S 148 ON GROUND THAT RE-ASSESSMENT PROCEEDINGS HAD BEEN INITIATED AFTER PERIOD OF FOUR YEARS FROM END OF RELEVANT ASSESSMENT YEAR AND PRE- CONDITION FOR SUCH INITIATION THAT THERE WAS FAILURE ON PART OF ASSESSEE TO FULLY AND TRULY DISCLOSE ALL MATERIAL PARTICULARS NECESSARY FOR ASSESSMENT WAS ABSENT-ASSESSEE SUBMITTED THAT IT WAS CLEAR CASE OF CHANGE OF OPINION, AS ISSUE SOUGHT TO BE RAKED UP BY WAY OF IMPUGNED NOTICE U/S 148 HAD BEEN DULY CONSIDERED BY AO DURING ORIGINAL ASSESSMENT U/S 143(3)-HELD, IN CIT VS. USHA INTERNATIONAL LTD IT HELD THAT RE-ASSESSMENT PROCEEDINGS WOULD BE INVALID IN CASE AN ISSUE OR QUERY WAS RAISED AND ANSWERED BY 7 ASSESSEE IN ORIGINAL ASSESSMENT PROCEEDINGS BUT THEREAFTER AO DID NOT MAKE ANY ADDITION IN ASSESSMENT ORDER IN SUCH SITUATIONS IT SHOULD BE ACCEPTED THAT ISSUE WAS EXAMINED BUT AO DID NOT FIND ANY GROUND OR REASON TO MAKE ADDITION OR REJECT STAND OF THE ASSESSEE-RE-ASSESSMENT WOULD BE INVALID BECAUSE AO HAD FORMED OPINION IN ORIGINAL ASSESSMENT, THOUGH HE HAD NOT RECORDED HIS REASONS- CASE OF ASSESSEE WAS BASED CHANGE OF OPINION-QUESTIONNAIRE AND PARTICULARLY QUESTION 8.1 SPECIFICALLY RAISED ISSUE WITH REGARD TO SHARE CAPITAL-IT REQUIRED ASSESSEE TO GIVE LIST, SOURCE, GENUINENESS, IDENTITY OF SHARE HOLDERS ALONG WITH CONFIRMATION COPIES OF LEDGER ACCOUNT OF PARTY INCLUDING CONFIRMATION OF MODE, DATE, ADDRESS AND ACKNOWLEDGEMENT OF RETURN, ETC. FROM SAID PARTY ALONG WITH SOURCE AND RELEVANT BANK ENTRIES-SAID INFORMATION WAS PROVIDED BY ASSESSEE- AFTER RECEIPT OF SAID INFORMATION, AO DID NOT THINK IT FIT TO MAKE ADDITION AND, UNDER THESE CIRCUMSTANCES, NO ADDITION ITSELF AMOUNTED TO FORMING OPINION AS HAD BEEN HELD IN USHA INTERNATIONAL LTD-PRESENT EXERCISE OF ISSUING NOTICE U/E 148 WOULD AMOUNT TO NOTHING BUT CHANGE OF OPINION, WHICH WAS NOT PERMISSIBLE- PERUSAL OF REASONS FOR INITIATING RE-ASSESSMENT SHOWED THAT THERE WAS NOT EVEN AN ALLEGATION THAT THERE HAD BEEN FAILURE ON PART OF ASSESSEE TO FULLY AND TRULY DISCLOSE ALL MATERIAL PARTICULARS 8 NECESSARY FOR RE-ASSESSMENT PERUSAL OF REASONS FOR INITIATING RE-ASSESSMENT SHOWED THAT THERE WAS NOT EVEN AN ALLEGATION THAT THERE HAD BEEN FAILURE ON PART OF ASSESSEE TO FULLY AND TRULY DISCLOSE ALL MATERIAL PARTICULARS NECESSARY FOR REASSESSMENT ASSESSEES PETITION ALLOWED. 6.1 AFTER PERUSING THE AFORESAID JUDGMENT OF THE HO NBLE HIGH COURT OF DELHI, I AM OF THE CONSIDERED VIEW THAT TH E ISSUE IN DISPUTE IS SQUARELY COVERED BY THE AFORESAID JUDGMENT, HENC E, RESPECTFULLY, FOLLOWING THE AFORESAID DECISION, I QUASH THE ASS ESSMENT BEING CHANGE OF OPINION AND ACCORDINGLY ALLOW THE LEGAL I SSUE IN DISPUTE RAISED VIDE GROUND NO. 3 BY THE ASSESSEE. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED ON 08-08-2017. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED : 08-08-2017 SR BHATANGAR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI. 9