Dy. Commissioner of Income Tax, Lucknow V. Shri Jasminder Singh, Lucknow

ITA 745/LKW/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1067 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-03-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 19-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Difference of opinion; Assessment record; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 43B; 194C; 147; 148; 6

Judgement Text

I.T.A. NO.745/LKW/2016 ASSESSMENT YEAR:2009-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER I.T.A. NO.745/LKW/2016 ASSESSMENT YEAR:2009-10 DY.C.I.T., RANGE-IV, LUCKNOW. VS. SHRI JASMINDER SINGH, 28, AMIR NAGAR, LUCKNOW. PAN:ADWPS 3346 Q (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 10/10/2016. THE GROUNDS OF APPEAL TAKEN BY TH E REVENUE ARE REPRODUCED BELOW: 1. THE COMMISSIONER OF INCOME TAX (APPEAL) LUCKNOW HAS ERRED IN LAW & ON FACTS OF THE CASE IN ANNULLING TH E ASSESSMENT ORDER PASSED U/147/143(3) OF THE I.T. ACT, 1961 BY IGNORING THE FACT THAT THE REASSESSMENT PROCEEDINGS U/S147 R.W.S 148 INITIATED BY ASSESSING OFFICER WERE NOT BASED ON CH ANGE OF OPINION. 2. THE COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRE D IN LAW & ON FACTS OF THE CASE IN DELETING THE ADDITION /DISALLOWANCE OF RS.78,55,605/- IGNORING THE FACT THAT THE ASSESS EE FAILED TO DEPOSIT THE TDS WITHIN THE SPECIFIED TIME AS PROVID ED U/S SECTION 40A (IA) OF THE I.T.ACT,1961. APPELLANT BY SHRI V. K. BORA, D.R. RESPONDENT BY SHRI RAKESH GARG, ADVOCATE DATE OF HEARING 12/03/2018 DATE OF PRONOUNCEMENT 15 /0 3 /2018 I.T.A. NO.745/LKW/2016 ASSESSMENT YEAR:2009-10 2 2. AT THE OUTSET, LEARNED D. R. SUBMITTED THAT LEAR NED CIT(A) HAS QUASHED THE ASSESSMENT ORDER HOLDING IT TO BE BAD I N LAW ON THE BASIS THAT THE REOPENING WAS DONE MERELY ON THE BASIS OF CHANG E OF OPINION WHEREAS THE FACT REMAINS THAT THE ASSESSEE HAD NOT DEPOSITE D TDS WITHIN THE PRESCRIBED PERIOD OF TIME AND THEREFORE, DISALLOWAN CE U/S 40(A)(IA) WAS WARRANTED WHEREAS IN THE ORIGINAL ASSESSMENT THE AS SESSING OFFICER HAD MADE DISALLOWANCE ONLY ON ACCOUNT OF THE PROVISIONS OF SECTION 43B OF THE ACT. IN VIEW OF THE ABOVE IT WAS PRAYED THAT THE O RDER OF THE ASSESSING OFFICER BE RESTORED. 3. LEARNED A. R., ON THE OTHER HAND, SUBMITTED THAT THE REASONS ON WHICH THE ASSESSING OFFICER HAD REOPENED THE ASSESS MENT WERE ALREADY EXAMINED BY THE ASSESSING OFFICER DURING THE ORIGIN AL ASSESSMENT PROCEEDINGS AND THEREFORE, THE INITIATION OF REASSE SSMENT PROCEEDINGS AMOUNTED TO CHANGE OF OPINION WHICH IS NOT PERMITTE D UNDER THE LAW AND THEREFORE, LEARNED CIT(A) HAS RIGHTLY ALLOWED RELIE F TO THE ASSESSEE BY RELYING ON THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. [2002] 256 ITR 1 (DEL). L EARNED A. R. FURTHER SUBMITTED THAT HON'BLE BOMBAY HIGH COURT IN THE CAS E OF ASIAN PAINTS LTD. VS. DY.C.I.T. [2009] 308 ITR 195 (BOM) HAS FURTHER HELD THAT POWER U/S 147 CANNOT BE USED TO REVIEW THE ORDER. IT WAS SUBMITT ED THAT THE FULL BENCH JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE O F KELVINATOR OF INDIA LTD. (SUPRA) WAS ALSO RELIED WHILE DECIDING THIS ISSUE. INVITING OUR ATTENTION TO THE FACTS OF THE CASE, LEARNED A. R. TOOK US TO ORI GINAL ASSESSMENT ORDER PLACED AT PAGES 13 TO 17 OF THE PAPER BOOK. OUR SP ECIFIC ATTENTION WAS INVITED TO PARA 3 OF SUCH ORDER WHEREIN THE ASSESSI NG OFFICER HAD MADE DISALLOWANCE OF RS.1,46,579/- BEING AMOUNT OF TDS N OT DEPOSITED WITHIN THE PRESCRIBED PERIOD OF TIME AS PER THE PROVISIONS OF SECTION 43B OF THE ACT. OUR ATTENTION WAS ALSO INVITED TO LETTER DATED 25/1 1/2013 INTIMATING THE I.T.A. NO.745/LKW/2016 ASSESSMENT YEAR:2009-10 3 REASONS RECORDED FOR INITIATING THE ASSESSMENT PROC EEDINGS U/S 147 PLACED AT PAGES 35 & 36 OF THE PAPER BOOK AND THE REASONS RECORDED WERE READ AND IN VIEW OF THE REASONS RECORDED AND ADDITION MA DE DURING ASSESSMENT PROCEEDINGS, IT WAS SUBMITTED THAT IN THE REASONS R ECORDED THE ASSESSING OFFICER HAS TAKEN THE SAME ISSUE WHICH HAS ALREADY BEEN DECIDED BY HIM IN THE ORIGINAL PROCEEDINGS AND THEREFORE, LEARNED CIT (A) HAS RIGHTLY ALLOWED RELIEF TO THE ASSESSEE. 4. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ORIGINAL ASSESSMENT ORDER WAS PASSED ON 16/12/2011 WHEREIN VIDE PARA 3 THE ASSESSING OFFICE R HAD MADE AN ADDITION OF RS.1,46,579/- ON ACCOUNT OF DEPOSITING OF TDS AF TER THE DUE DATE OF FILING THE RETURN. THE ASSESSING OFFICER HAS MADE DISALLO WANCE U/S 43B OF THE ACT. THE REASONS RECORDED, PLACED AT PAGES 35 & 36 OF TH E PAPER BOOK, REVEAL THAT THIS TAX DEDUCTED AT SOURCE RELATED TO THE AMO UNT OF RS.78,55,605/- WHICH THE ASSESSEE HAD PAID AND ON WHICH TAX WAS DE DUCTED BUT WAS PAID AFTER THE PRESCRIBED PERIOD OF TIME. THE REASONS R ECORDED, AS INTIMATED TO THE ASSESSEE VIDE LETTER DATED 25/11/2013, ARE REPR ODUCED BELOW: 3. IN THIS CASE ASSESSMENT WAS COMPLETED U/S 143(3 ) AT THE INCOME OF RS.31,17,520/-. AFTER COMPLETION OF THE ASSESSMENT IT IS OBSERVED THAT THE ASSESSING OFFICER HAS DISAL LOWED THE AMOUNT OF IDS AMOUNT TO RS.1,46,579/- ON THE ACCOUN T OF THE PAYMENT MADE BY THE ASSESSEE AFTER DUE DATE OF FILL ING OF RETURN OF INCOME WHILE AS PER PROVISION U/S 40A(IA) IT IS HELD THAT ANY AMOUNT SHALL NOT BE DEDUCTED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFIT & SERVICES OR FEES FOR TECHNICAL SERVICES PAYABLE TO A RESIDENT, OR AMOUNT PAYABLE TO A CONTRACTOR OR SUB-CONTRACTOR, BEING RESIDENT, FOR C ARRYING OUT ANY WORK. ON WHICH TAX DEDUCTIBLE AT SOURCE UNDER C HAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER , DEDUCTION, HAS NOT BEEN PAID ON OR BEFORE THE DUE D ATE SPECIFIED IN SUB-SECTION (1) OF SECTION 139. I.T.A. NO.745/LKW/2016 ASSESSMENT YEAR:2009-10 4 ON PERUSAL OF THE FILE IT IS REVEALED, THAT ASSESSE E HAS MADE THE AMOUNTS OF RS. 3,00,000/- IN THE HEAD OF A RTISTS AND MODEL REMUNERATION U/S 194J, RS. 39,75,000/- IN THE HEAD OF ARTISTS AND MODEL REMUNERATION U/S 194J, RS. 1,14,9 75/- IN THE HEAD OF SECURITY EXPENSES U/S 194C, RS. 28,65,630/- IN THE HEAD OF SOUND AND LIGHT HIRE CHARGES U/S 194C AND RS.3,00,000/- IN THE HEAD OF GROUND/HALL RENT U/S 1 941 TOTAL AMOUNTING TO RS. 78,55,605/- AND YOU DID NOT DEPOSI T THE TDS THEREON OF RS. 1,46,579/- ON OR BEFORE THE DUE DATE OF FILLING OF RETURN. 4. THEREFORE, I HAVE REASON TO BELIEVE THAT THE AMO UNT OF RS.78,55,605/- IS NOT ALLOWABLE EXPENSES AND SHOULD BE ADEED BACK TO YOUR INCOME AND THERE IS AN ESCAPED INCOME TO THE TUNE OF RS.78,55,605/- WITHIN THE MEANING OF SECTIO N 147 OF THE I.T. ACT. ISSUE NOTICE U/S 148. 4.1 FROM THE ABOVE REASONS RECORDED, IT IS APPARENT THAT THE TDS OF RS.1,46,579/- FOR WHICH THE ASSESSING OFFICER HAD M ADE THE DISALLOWANCE RELATED TO THE AMOUNT OF RS.78,55,605/- WHICH THE A SSESSING OFFICER PROPOSED TO MAKE ADDITION ON ACCOUNT OF THE PROVISI ONS OF SECTION 40(A)(IA) OF THE ACT. THE ASSESSMENT ORDER AND REASONS RECOR DED, IF READ TOGETHER, CLEARLY INDICATE THAT THE ASSESSING OFFICER HAD IN THE ORIGINAL ASSESSMENT PROCEEDINGS MADE DISALLOWANCE OF TDS UNDER THE PROV ISIONS OF SECTION 43B WHEREAS FOR REOPENING OF THE CASE THE ASSESSING OFF ICER WANTED TO MAKE DISALLOWANCE U/S 40(A)(IA) OF THE ACT. IT IS A CLE AR CASE OF CHANGE OF OPINION WHICH AS PER JUDICIAL PRECEDENTS IS NOT PERMISSIBLE IN THE LAW. HON'BLE BOMBAY HIGH COURT IN THE CASE OF ASIAN PAINTS LTD. (SUPRA) HAS ALLOWED RELIEF TO THE ASSESSEE BY HOLDING THAT THE POWER U/ S 147 CANNOT BE USED TO REVIEW THE ORDER. WHILE DECIDING SO, HON'BLE COURT HAS FOLLOWED THE FULL BENCH JUDGMENT OF HON'BLE DEOLHI HIGH COURT IN THE CASE OF KELVINATOR INDIA LTD. FOR THE SAKE OF COMPLETENESS, THE RELEVANT FI NDINGS OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF ASIAN PAINTS LTD. ARE REP RODUCED BELOW: I.T.A. NO.745/LKW/2016 ASSESSMENT YEAR:2009-10 5 7. WE HAVE HEARD THE LEARNED COUNSEL APPEARING FOR BOTH SIDES. WE HAVE ALSO GONE THROUGH THE JUDGMENTS ON W HICH RELIANCE WAS PLACED BY THE LEARNED COUNSEL APPEARIN G FOR BOTH SIDES. 8. IN THE ORDER REJECTING THE OBJECTION FILED BY TH E PETITIONER TO THE NOTICE UNDER SECTION 148, RESPONDENT NO. 1 HAS OBSERVED ' VERIFICATION OF ASSESSMENT RECORD REVEALS THAT THE SAID DETAILS WERE CALLED FOR BUT INADVERTENTLY THE SAME WERE NOT TAKEN INTO ACCOUNT WHILE FRAMING THE ASSESSMENT AND, THEREFORE , IT CANNOT BE SAID THAT THERE IS A CHANGE OF OPINION.' ACCORDI NG TO RESPONDENT NO. 1, THUS, THE RELEVANT MATERIAL WAS A VAILABLE ON RECORD, BUT HE FAILED TO APPLY HIS MIND TO THAT MAT ERIAL IN MAKING THE ASSESSMENT ORDER. THE QUESTION IS, CAN R ESPONDENT NO. 1 TAKE RECOURSE TO THE PROVISION OF SECTION 147 FOR HIS OWN FAILURE TO APPLY HIS MIND TO THE MATERIAL WHICH, AC CORDING TO HIM, IS RELEVANT AND WHICH WAS AVAILABLE ON RECORD. WE FIND THAT THIS SITUATION HAS BEEN CONSIDERED BY THE FULL BENC H OF THE DELHI HIGH COURT IN ITS JUDGMENT IN THE CASE OF CIT V. KELVINATOR OF INDIA LTD. [2002] 256 ITR 1 AND THE FULL BENCH HAS OBSERVED THUS (PAGE 19) : 'THE SAID SUBMISSION IS FALLACIOUS. AN ORDER OF ASS ESSMENT CAN BE PASSED EITHER IN TERMS OF SUB-SECTION (1) OF SECTION 143 OR SUB-SECTION (3) OF SECTION 143. WHEN A REGUL AR ORDER OF ASSESSMENT IS PASSED IN TERMS OF THE SAID SUB-SE CTION (3) OF SECTION 143 A PRESUMPTION CAN BE RAISED THAT SUC H AN ORDER HAS BEEN PASSED ON APPLICATION OF MIND. IT IS WELL KNOWN THAT A PRESUMPTION CAN ALSO BE RAISED TO THE EFFECT THAT IN TERMS OF CLAUSE (E) OF SECTION 114 OF THE I NDIAN EVIDENCE ACT JUDICIAL AND OFFICIAL ACTS HAVE BEEN R EGULARLY PERFORMED. IF IT BE HELD THAT AN ORDER WHICH HAS BE EN PASSED PURPORTEDLY WITHOUT APPLICATION OF MIND WOULD ITSEL F CONFER JURISDICTION UPON THE ASSESSING OFFICER TO REOPEN T HE PROCEEDING WITHOUT ANYTHING FURTHER, THE SAME WOULD AMOUNT TO GIVING A PREMIUM TO AN AUTHORITY EXERCISING QUAS I-JUDICIAL FUNCTION TO TAKE BENEFIT OF ITS OWN WRONG.' 9. IT IS CLEAR FROM THE OBSERVATIONS MADE ABOVE THA T THE FULL BENCH OF THE DELHI HIGH COURT HAS TAKEN A VIEW THAT IN A SITUATION WHERE ACCORDING TO THE ASSESSING OFFICER HE FAILED TO APPLY HIS MIND TO THE RELEVANT MATERIAL IN MAKING T HE ASSESSMENT ORDER, HE CANNOT TAKE ADVANTAGE OF HIS O WN WRONG AND REOPEN THE ASSESSMENT BY TAKING RECOURSE TO THE PROVISIONS I.T.A. NO.745/LKW/2016 ASSESSMENT YEAR:2009-10 6 OF SECTION 147. WE FIND, OURSELF, IN RESPECTFUL AGR EEMENT WITH THE VIEW TAKEN BY THE FULL BENCH OF THE DELHI HIGH COURT. 10. IT IS FURTHER TO BE SEEN THAT THE LEGISLATURE H AS NOT CONFERRED POWER ON THE ASSESSING OFFICER TO REVIEW ITS OWN ORDER. THEREFORE, THE POWER UNDER SECTION 147 CANNO T BE USED TO REVIEW THE ORDER. IN THE PRESENT CASE, THOUGH TH E ASSESSING OFFICER HAS USED THE PHRASE ' REASON TO BELIEVE', A DMITTEDLY BETWEEN THE DATE OF THE ORDER OF ASSESSMENT SOUGHT TO BE REOPENED AND THE DATE OF FORMATION OF OPINION BY TH E ASSESSING OFFICER, NOTHING NEW HAS HAPPENED, THEREFORE, NO NE W MATERIAL HAS COME ON RECORD, NO NEW INFORMATION HAS BEEN REC EIVED, IT IS MERELY A FRESH APPLICATION OF MIND BY THE SAME A SSESSING OFFICER TO THE SAME SET OF FACTS AND THE REASON THA T HAS BEEN GIVEN IS THAT THE SOME MATERIAL WHICH WAS AVAILABLE ON RECORD WHILE ASSESSMENT ORDER WAS MADE WAS INADVERTENTLY E XCLUDED FROM CONSIDERATION. THIS WILL, IN OUR OPINION, AMOU NT TO OPENING OF THE ASSESSMENT MERELY BECAUSE THERE IS CHANGE OF OPINION. THE FULL BENCH OF THE DELHI HIGH COURT IN ITS JUDGM ENT IN THE CASE OF KELVINATOR [2002] 256 ITR 1 REFERRED TO ABOVE, HAS TAKEN A CLEAR VIEW THAT REOPENING OF ASSESSMENT UND ER SECTION 147 MERELY BECAUSE THERE IS A CHANGE OF OPINION CAN NOT BE ALLOWED. IN OUR OPINION, THEREFORE, IN THE PRESENT CASE ALSO, IT WAS NOT PERMISSIBLE FOR RESPONDENT NO. 1 TO ISSUE N OTICE UNDER SECTION 148. 4.2 KEEPING IN VIEW THE ABOVE FACTS AND CIRCUMSTANC ES AND JUDICIAL PRECEDENTS, WE DO NOT FIND ANY INFIRMITY IN THE ORD ER OF LEARNED CIT(A) AND THEREFORE, THE APPEAL OF THE REVENUE IS DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 15/03/2018) SD/. SD/. (PARTHA SARATHI CHAUDHURY) ( T. S. KAPOOR ) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED:15/03/2018 *SINGH I.T.A. NO.745/LKW/2016 ASSESSMENT YEAR:2009-10 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW