Bengal Pipe Industry, Kolkata V. ITO, Ward 44(4), Kolkata, Kolkata

ITA 697/KOL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1641 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 10-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARNIDAM BHATTACHARJEE CIT REV
• Assessee Lawyers: SOUMITRA CHOW DHURY
• Keywords: Reopening of assessment
• Section: 143(3); 194C; 147; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC, KOLKATA [BEFORE HONBLE SHRI J. SUDHAKAR REDDY] I.T.A. NO. 697/KOL/2017 ASSESSMENT YEAR 2005-06 M/S. BENGAL PIPE INDUSTRY.............................APPELLANT 9, JAGMOHAN MULLICK LANE KOLKATA - 700007 [PAN : AADFB3022E] I.T.O. WARD 44(4).........................RESPONDENT 3, GOVT. PLACE (WEST) KOLKATA - 700001 APPEARANCES BY: SHRI SOUMITRA CHOWDHURY, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE. SHRI ARNIDAM BHATTACHARJEE, ADDL CIT APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : JULY 26, 2017 DATE OF PRONOUNCING THE ORDER : AUGUST 23, 2017 ORDER THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), KOLKATA DATED 03.12.2016 FOR THE ASSESSMENT YEAR 2005-06. 2. AFTER HEARING THE RIVAL CONTENTION, I TAKE UP THE ISSUE OF VALIDITY OF REOPENING OF ASSESSMENTS WHICH IS GROUND NO 2 AND 3 OF THE ASSESSEES APPEAL. 3. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2004-05 ON 31.10.2005 AND ASSESSMENT U/S 143(3) WAS COMPLETED ON 21.12.2007. THEREAFTER, THE ASSESSMENT WAS REOPENED UNDER SECTION 147 AND A NOTICE UNDER SECTION 148 WAS ISSUED ON 26.03.2007. FROM THE ABOVE DATES AND EVENTS, IT IS CLEAR THAT THE REOPENING ASSESSMENT 2 I.T.A. NO. 697/KOL/2017 ASSESSMENT YEAR 2005-06 M/S. BENGAL PIPE INDUSTRY WAS MADE BEYOND THE PERIOD OF 4 YEARS AND AS THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3), THE REOPENING IN QUESTION IS GOVERNED BY THE FIRST PROVISO TO SECTION 147 OF THE ACT. 4. THE REASONS FOR THE REOPENING ARE BROUGHT OUT AT PAGE OF THE LD. CIT (A) ORDERS WHICH READS AS FOLLOWS: A NOTICE U/S 154 WAS ISSUED ON THE GROUND OF NON DEDUCTION OF TDS OF TAX ON FREIGHT & TRANSPORT CHARGES PAID IN VIOLATION OF SECTION 40(A)(IA) OF THE ACT. SINCE THE ISSUE INVOLVED POINT OF LAW AND THE PROPOSITION U/S 154 NOT APPLICABLE. BEING A MISTAKE APPARENT FROM RECORD, THE PROCEEDINGS INITIATED U/S 154 IS HEREBY DROPPED AND PROPOSE TO RE-OPEN THE CASE BY INVOKING THE PROVISIONS OF SECTION 147 FOR ISSUE OF NOTICE U/S 148. THE ASSESSEE, A FIRM WAS ENGAGED IN MANUFACTURE OF M/S. BLACK PIPES. PERUSAL OF RECORD REVEALED THAT THE ASSESSEE FIRM CLAIMED RS. 15,33,571/- AGAINST FREIGHT & TRANSPORT CHARGES AND DEBITED IN PROFIT & LOSS ACCOUNT. AS PER PROVISIONS OF SECTION 40(A)(IA) READ WITH SECTION 194C THE ASSESSEE FIRM WAS LIABLE TO DEDUCT TAX, AS APPLICABLE AND DEPOSIT IT TO GOVT. ACCOUNT WHICH WAS NOT DONE AND ACCORDINGLY THE CLAIM OF DEDUCTION IS NOT ALLOWABLE. IT IS PERTINENT TO MENTION HERE THAT THERE WAS NO COMMENT ON THE AUDIT REPORT IN THE PLACE PROVIDED FOR. I HAVE, THEREFORE, REASONS TO BELIEVE THAT INCOME ESCAPED ASSESSMENT FOR OMISSION ON THE PART OF THE ASSESSEE TO DISCLOSE A TRUE & CORRECT INCOME. A PERUSAL OF THE ABOVE REASONS DEMONSTRATE THAT THERE IS NO WHISPER, MUCH LESS AN ALLEGATION THAT THE ASSESSEE HAS FAILED TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FOR REASSESSMENT. UNDER THE CIRCUMSTANCES, THE ASSESSMENT HAS TO BE NECESSARILY HELD AS BAD IN LAW BY APPLYING THE PROPOSITION OF LAW LAID DOWN IN THE CASE OF HARYANA ACRYLIC MANUFACTURING CO. VS CIT (WP(C) 407 4 / 2007 JUDGMENT DATED 02.11.2008 OF THE HONBLE DELHI HIGH COURT. 3 I.T.A. NO. 697/KOL/2017 ASSESSMENT YEAR 2005-06 M/S. BENGAL PIPE INDUSTRY SIMILAR ARE THE JUDGMENTS IN THE CASE OF I) GERMAN REMEDIES LTD. VS. DCIT (2006) 287 ITR 494 (BOM) II) FOREMER FRANCE (2003) 264 ITR 566 (SC). RESPECTFULLY FOLLOWING THE SAME, WE HOLD THAT IN THE ABSENCE OF ANY ALLEGATION THAT THE ASSESSEE HAS FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT, THE REOPENING OF ASSESSMENT IS BAD IN LAW. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 23 RD , 2017. SD/- (J. SUDHAKAR REDDY) ACCOUNTANT MEMBER DATED: 23/08/2017 BISWAJIT, SR. P.S. COPY OF ORDER FORWARDED TO: 1. M/S. BENGAL PIPE INDUSTRY, KOLKATA - 700007 2. ITO WARD 44(4), KOLKATA - 700007 3. THE CIT(A) 4. THE CIT 5. DR TRUE COPY, BY ORDER, SR. P.S. / H.O.O. ITAT, KOLKATA