Appeal details
Counselvise Citation
75520114 RSA 2013
Assessee PAN
Bench
Appeal Number
Duration Of Justice
6 month(s) 17 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
23-08-2013
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
B
Assessment Year
2002-2003
Appeal Filed On
06-02-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B NEW DELHI) BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.755/DEL/2013 ASSESSMENT YEAR : 2002-03 DCIT, M/S DLF LIMITED, CIRCLE-10 (1), FORMERLY KNOWN AS DLF UNIVERSAL NEW DELHI. V. LTD., DLF CENTRE, 9 TH FLOOR, SANSAD MARG, NEW DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AAACD AAACD AAACD AAACD- -- -3994 3994 3994 3994- -- -N NN N APPELLANT BY : DR. SUDHA KUMAR, SR. DR. RESPONDENT BY : SHRI R.S. SINGHVI, C.A. ORDER PER TS KAPOOR, AM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORD ER OF LD CIT(A) DATED 29.11.2012. THE GROUNDS RAISED BY THE R EVENUE ARE AS UNDER:- 1. WHETHER THE CIT(A) UNDER THE FACTS AND CIRCUMSTANCES O F THE CASE AND IN LAW WAS JUSTIFIED IN QUASHING THE REOPENING OF THE ASSESSMENT U/S 147 OF THE INCOME TAX ACT, 1961. 2. THE APPELLANT CRAVES LEAVE, TO ADD, ALTER OR AMEND A NY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF THE HEARING. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ORIGINAL ASSESSMENT OF THE ASSESSEE WAS COMPLETED U/S 143(3) ON DATED 31.3.2005 DETE RMINING THE INCOME AT ` .11,44,04,216/- AGAINST RETURNED INCOME OF ITA NO755/DEL/2013 2 ` .13,91,01,268/-. SUBSEQUENTLY THE CASE WAS REVIEWED BY LD CIT IV, NEW DELHI AND VIDE HIS ORDER DATED 15.3.2007 U/S 263 THE ASSESSING OFFICER WAS DIRECTED TO MAKE PROPORTIONATE DISALLOWAN CE OF EXPENDITURE RELATING TO EARNING OF DIVIDEND INCOME OF ` .6,93,59,402/-. ACCORDINGLY, THE ASSESSMENT ORDER WAS COMPLETED U/S 143( 3)/263 AND ORDER DATED 31.12.2007 WAS PASSED BY MAKING A DISALLOWA NCE OF `.6,21,46,028/- U/S 14A OF THE INCOME TAX ACT, 1961. LATER ON ADDL. CIT, RANGE-X, NEW DELHI AFTER RECORDING REASONS FOR INITIATION OF PROCEEDINGS U/S 148 REOPENED THE CASE OF ASSESSEE BY RECOR DING THE FOLLOWING REASONS:- IT HAS BEEN NOTICED THAT INCOME FROM HOUSE PROPERTY IN RESPECT OF SHRI RAM SCHOOL HAS BEEN DECLARED IN THE P&L A/C WHEREAS THE SAID IMMOVABLE PROPERTY IS N OT REFLECTED AS AN ASSET EI THER FIXED ASSET OR CURRENT IN THE AUDITED BALANCE SHEET OF THE C OMPANY. AS AGAINST THE GROSS RENTAL INCOME OF ` .24,68,000/- THE ASSESSEE HAS ALSO CLAIMED DEDUCTION @ 30% UNDER SEC. 24 OF THE IT ACT IN RESPECT OF INCOME FROM HOUSE PROPERTY FROM SHRI RAM S CHOOL. THE FACT WAS ACCEPTED BY THE ASSESSEE DURING THE COURSE O F ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2006-07 U/S 142(2A) OF IT ACT THAT THE RENT WAS RECEIVED FROM S HRI RAM SCHOOL IN TERMS OF AGREEMENT DATED 27.12.2000 FOR O PERATION AND RUNNING THE SHRI RAM SCHOOL- ARAVALI. THE SAID A MOUNT WAS SHOWN AS INCOME UNDER THE HEAD INCOME FROM HOUSE PROP ERTY. IT IS SUBMITTED THAT DUE TO AN ARBITRATION AWARD THE SITES OF THE SCHOOL WENT BACK TO DLF QUTAB ENCLAVE COMPLEX EDUCAT IONAL CHARITABLE TRUST EFFECTIVE FROM 1.4.1994. COPY OF TH E ABOVE LEASE DEED AND ARBITRATION AWARD HAS ALREADY BEEN FURNISHED TO THE SPECIAL AUDITORS FOR ASSESSMENT YEAR 2006-07. HOWEVER, I T IS SUBMITTED THAT IN TERMS OF THE ABOVE LEASE DEED, SHRI RAM ITA NO755/DEL/2013 3 SCHOOL CONTINUED TO PAY RENT TO THE ASSESSEE COMPANY WH O IN TURN PAID THE SAME AS COMPENSATION TO THE AFORESAID TRU ST. IT IS SUBMITTED THAT THE SAID AMOUNT HAS BEEN SHOWN BY THE SAI D TRUST AS ITS INCOME UNDER THE HEAD INCOME FROM HOUSE PR OPERTY. A COPY EACH OF THE BALANCE SHEET AND COMPUTATION OF INCOME OF THE SAID TRUST ARE ALSO ENCLOSED EVIDENCING THAT THE SAI D AMOUNT HAS ALSO BEEN OFFERED FOR TAX BY THE TRUST. THUS THE ASSE SSEE IS CLAIMING ` .7,40,000/- AS DEDUCTION @ 30% OF ` .24,68,,000/- WHICH IS APPARENTLY NOT ALLOWABLE TO THE ASSESSEE AS ASSESSEE HAS THEMSELVES SAID THAT THIS INCOME IS NOT ASSESSABLE IN THEIR HANDS DURING ASSESSMENT PROCEEDINGS OF ASSESSMENT YEAR 2006-07. BESIDES THIS THE ASSESSEE HAS PAID THIS AMOUNT TO DLF TRUST A ND HAS DEBITED THE ENTIRE AMOUNT OF ` .24,68,000/- TO P&L A/C CLAIMING IT AS ITS BUSINESS EXPENDITURE. THIS EXPENDITURE IS NOT RELATED TO BUSINESS ACTIVITIES OF THE ASSESSEE COMPANY AND HENCE NOT ALLOWABLE. SIMILARLY THE CLAIM OF TDS ON RENT O F ` .5,03,4723/- IS ALSO NOT TO BE ALLOWED AGAINST THE INCOME ACCRUED. IN CONCLUSION ASSESSEE HAS WRONGLY CLAIMED ` .24,64,000/- AS BUSINESS EXPENDITURE, WRONGLY CLAIMED STATUTORY DEDUCT ION U/S 24 OF IT ACT AMOUNTING TO ` .7,40,000/- AND WRONGLY CLAIMED CREDIT OF TDS OF ` .5,03,472/- AGAINST ITS ASSESSED INCOME. ALL THIS HAVE RESULTED IN THE ESCAPEMENT OF INCOME DUE TO FAIL URE ON PART OF THE ASSESSEE TO REPORT ALL THE FACTS RELATING TO ASSESSM ENT OF CORRECT INCOME. THE ASSESSEE HAS DISCLOSED DURING THE YEAR EXEMPT INCOME F ROM DIVIDEND OF ` .6,93,20,030/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 263/143(3) THE ASSESSING OFFICER HAS ADDED BACK ` .6,21,46,024/- AS DISALLOWANCE U/S 14A OF THE IT ACT V IDE ORDER DATED 31.12.2007. LATER ON THE ACTION OF THE CIT FO R REOPENING ITA NO755/DEL/2013 4 THE CASE U/S 263 WAS CHALLENGED BEFORE THE ITAT AND LD ITAT UPHELD VIDE I.T.A. NO.2004/DEL/2007 DATED 31.10.200 7 THAT THE CIT WAS NOT JUSTIFIED IN ACTION. SINCE THE VALIDITY O F THE ORODER OF THE CIT PASSED U/S 263 OF THE IT ACT HAS ITSELF NOT BEEN UPHELD THE ORDER OF THE ASSESSING OFFICER ARISING OUT OF THE O RDER PASSED BY THE CIT WAS TREATED AS INVALID BY THE CIT(A) VIDE HIS ORDER DATED 27.1.2009. HOWEVER, IT IS PERTINENT TO NOTE TH AT WITH REGARD TO THE ISSUE OF DISALLOWANCE U/S 14A OF THE IT A CT THE CBDT HAS ISSUED RULE 8D IN MARCH 2008 WITH RETROSPECTIV E EFFECT. IN VIEW OF THESE OBSERVATIONS THE INCOME EARNE D BY THE ASSESSEE FIRM DIVIDEND HAS BEEN DISCLOSED AND NO EXPENDITU RE U/S 14A OF IT ACT HAS BEEN ADDED BACK AS PER RULE 8D O F IT RULES. I HAVE THEREFORE, REASONS TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE ASSESSMENT YEAR 2002- 03. HENCE APPROVAL MAY KINDLY BE GIVEN AS PER SECTION 151(1) OF IT ACT AS THE ASSESSMENT YEAR IN QUESTION IS BEYOND FOUR YEARS AND THE ASSESSMENT HAS BEEN COMPLETED U/S 143(3) OF THE I T ACT. 3. DURING ASSESSMENT PROCEEDINGS U/S 148, THE ASSESSING OFFIC ER ON THE ONE HAND DISALLOWED AN AMOUNT OF ` .24,68,000/- WHICH WAS CLAIMED AS BUSINESS EXPENDITURE AND ON THE OTHER HAND REJECTED THE CLAIM OF THE ASSESSEE REGARDING INCOME FROM HOUSE PROPERTY AND SHI FTED THE INCOME OF ` .24,68,000/- FROM INCOME FROM HOUSE PROPERTY TO INCO ME FROM OTHER SOURCES AND THEREFORE FURTHER DISALLOWED A SUM OF ` .7,40,000/- BEING SUM EQUAL TO 30% OF ` .24,68,000/- CLAIMED BY THE ASSESSEE U/S 24C OF THE ACT. WITH RESPECT TO DISALLOWANCE U/S 14A READ WITH RULE 8D, THE ASSESSING OFFICER MADE THE DISALLOWAN CE OF ` .3,58,99,000/-. THE ASSESSEE WENT IN APPEAL AGAINST THE REOPENING U/S 148 AND SUBMITTED AS UNDER:- ITA NO755/DEL/2013 5 I) THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS QUESTIONNAIRE DATED 21.,9.2004 WAS ISSUED BY THE THEN ASSESSING OFFICER AND THE SAME WAS REPLIED VIDE ITEM NO.2 OF APPELLANTS LETTER DATED 27.9.2004. II) THAT THE ASSESSING OFFICER HAD RAISED QUERY VIDE ORDER SH EET ENTRY DATED 6.12.2004 RELATING TO DETAILS OF INTEREST AND DIVIDEND INCOME WHICH WAS REPLIED VIDE ITEM NO.9 OF APPELLANTS LETTER DATED 22.12.2004. 4. IN VIEW OF THE ABOVE IT WAS SUBMITTED THAT DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS SPECIFICALLY REQUIRED TO FI LE INFORMATION ON CERTAIN POINTS AND THESE WERE FILED. THEREFORE, TH E ASSESSEE HAD MADE FULL DISCLOSURE AND HAD DECLARED TRULY ALL NECE SSARY MATERIAL FACTS FOR COMPUTATION OF ITS INCOME AND THERE WAS NO FAILUR E ON ITS PART AND THUS THERE WAS NO OCCASION FOR ESCAPEMENT OF INCOME AND CONSEQUENT REOPENING WITHIN THE MEANING OF SECTION 147 OF THE A CT. RELIANCE IN THIS RESPECT WAS PLACED ON A NUMBER OF JUDICIAL PRONOUNCEM ENTS WITH THE PROPOSITION THAT ONCE THE ASSESSEE HAD DISCLOSED FULLY AND TRULY ALL INFORMATION RELATING TO SPECIFIC QUERY, THE REOPENIN G AFTER A PERIOD OF FOUR YEARS WITHOUT HAVING NOTED ANY FAILURE ON THE PART OF ASSESSEE WAS ILLEGAL. THE FOLLOWING CASE LAWS WERE RELIED:- 1. CIT V. SHREE RAJASTHAN SYNTEX LTD. 217 CTR 209 (RAJ. ). 2. CIT V. SIFL STOCK BROKING LTD. 325 ITR 285 (DEL.). 3. GARDEN SILK MILLS LTD. V. DCIT 222 ITR 68 (GUJ.). 4. JINDAL PHOTO FILMS LTD. V. DCIT 234 ITR 170 (DEL.). 5. CIT V. KELVINATOR OF INDIA LTD. 256 ITR 11 (DEL.). 6. CIT V., EICHER LTD. 163 TAXMAN 259 (DELK.). 7. CIT V. RAJKUMAR MAHAJAN (P) LTD. 340 ITR 570 (DEL.) . ITA NO755/DEL/2013 6 5. THE LD CIT(A) AFTER GOING THROUGH THE SUBMISSIONS OF ASSESSEE HELD THE REOPENING BAD IN LAW AND QUASHED THE ASSESSMENT ORDER. RELEVANT FINDINGS OF LD CIT(A) ARE AS UNDER:- I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT, OBSE RVATION OF THE ASSESSING OFFICER AND VARIOUS JUDICIAL PRONOUNC EMENTS RELIED UPON BY THE APPELLANT ON THE ISSUE OF REOPENI NG U/S 147 OF THE IT ACT. IN THIS CASE ORIGINAL ASSESSMENT U/S 143(3) W AS PASSED ON 31.3.2005 DETERMINING THE TOTAL INCOME AT ` .13,91,01,268/-. THEREFORE, ASSESSMENT ORDER WAS SET ASID E BY THE CIT-IV, NEW DELHI VIDE ITS ORDER DATED 15.3.2007 AS ASSESSMENT WAS TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE ASSESSMENT U/S 143(3) R.W.S. 263 WAS PASSED ON 31.12.2007 DETERMINING TOTAL INCOME AT ` .17,12,55,256/- AFTER MAKING DISALLOWANCE OF ` .6,21,46,028/- U/S 14A OF THE IT ACT. THEREAFTER ASSESSMENT WAS REOPENED U/ S 147 OF THE IT ACT ON THE GROUND THAT WHILE MAKING ORIGI NAL ASSESSMENT AND ASSESSMENT U/S 143 R.W.S. 263, THE APPELLANT HAD CLAIMED 30% DEDUCTION ON THE RENTAL INCOME RECE IVED FROM SHRI RAM SCHOOL OF ` .24,68,00/-. FURTHER IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER ALLOWED CREDIT OF TDS OF ` .5,03,472/- WHICH WAS NOT CORRECT AS PER THE REASONS RECORDED. IT IS CLAIM ED BY THE ASSESSING OFFICER THAT SINCE APPELLANT HAS NOT DISALLOWED EXPENSES RELATING TO EARNING OF DIVIDEND INCOME OF ` .6,93,20,030/- THEREFORE THE EXPENSES REMAIN TO BE DI SALLOWED IN THE ASSESSMENT ORDER. AS A RESULT INCOME HAS ESCAPED ASSESSMENT TO THAT EXTENT. IN THE RE-ASSESSMENT PROCEEDING S THE APPELLANT SUBMITTED THAT NO INCOME HAS ESCAPED AND THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER AFTER VERIFYING ITA NO755/DEL/2013 7 THE DETAILS SUBMITTED DURING THE COURSE OF ORIGINAL A SSESSMENT PROCEEDINGS. IT IS SEEN FROM THE QUESTIONNAIRE DATED 21 .9.2004 THAT ASSESSING OFFICER HAD SPECIFICALLY ASKED ABOUT THE ABOUT THE RENT RECEIVED FROM VARIOUS SOURCES, THE APPELLAN T SUBMITTED REPLY VIDE ITS LETTER DATED 27.9.2004 ABOUT THE RENT RECEIVED WHICH INCLUDES THE RENT RECEIVED FROM SHRI RAM SCHOO L AND TDS DEDUCTED THEREON.. AS REGARDS THE DIVIDEND INCOME OF ` .6,93,20,030/- THE ASSESSING OFFICER ASKED SPECIFIC DETAILS VIDE ITS ORDER SHEET ENTR Y DATED 6.12.2004 WHICH WAS REPLIED BY THE APPELLANT VIDE IT S LETTER DATED 22.12.2004. THIS CLEARLY SHOWS THAT IN THE ORIGI NAL ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAD APPLIED HI S MIND ON THESE ISSUES. IT IS SEEN FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFIC ER ACCEPTED THE EXPLANATION/CLARIFICATION SUBMITTED BY THE APPELLANT VIDE ITS REPLY DATED 27.9.2004 AND 22.12.2004 DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. THIS ESTABLISHES THAT ASSESSING OFFICER HAD APPLIED HIS MIND AND HE WAS SATISFIED WITH THE ENTRIES PASSED WITH REFERENCE TO RENT RECEIVED FRO M SHRI RAM SCHOOL, DEDUCTION CLAIMED U/S 24(A), CLAIM OF TDS DE DUCTED BY SHRI RAM SCHOOL AND DIVIDEND INCOME SHOWN BY THE APP ELLANT. ALL THESE FACTS PROVE THAT ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER AFTER PROPER APPLICATION OF MIND TO T HE PROVISIONS OF THE ACT AND DETAILS SUBMITTED BY THE APPE LLANT. THE APPELLANT HAD FILED ITS RETURN OF INCOME WITH COMPUT ATION OF INCOME WHEREIN THE PROFIT WAS CALCULATED AS PER THE P ROVISIONS OF THE ACT. IT IS CONTENDED BY THE APPELLANT THAT DURIN G THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAS ITA NO755/DEL/2013 8 EXAMINED ALL DETAILS RELEVANT TO ITS INCOME AND THERE AFTER FRAMED THE ASSESSMENT AT ` .13,91,01,268/-. THE RE-ASSESSMENT MADE BY THE ASSESSING OFFICER IS BAD IN LAW AND BASED ON MERE CHA NGE OF OPINION, DESPITE DISCLOSING ALL MATERIAL FACTS IN THE ASSESSMENT PROCEEDINGS. IN VIEW OF THE FACTS DISCUSSED ABOVE THE APPELLANT CONT ENDED THAT RE-ASSESSMENT PROCEEDINGS INITIATED BY THE ASSESSING O FFICER WITHOUT CHANGE IN ANY MATERIAL FACTS AND WITHOUT HAV ING ANY FRESH INFORMATION IN POSSESSION IS BASED ON MERE CHANGE OF OPINION ON SAME SET OF FACTS. IT IS SEEN THAT IN THE ORI GINAL ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER SOUGHT CLARIFICATION, EXPLANATION ON VARIOUS ISSUES INCLUDING THE RENT RECEIVED FROM SHRI RAM SCHOOL AND DEDUCTION CLAIMED U/S 24 (A). ON THE BASIS OF EXPLANATION FURNISHED BY THE APPELLAN T ON 27.9.2004 AND 22.12.2004 ON THE ISSUE OF RENT AND DIV IDEND INCOME, THE ASSESSING OFFICER WAS SATISFIED WITH THE EXPLA NATION AND CONTENTION OF THE APPELLANT WAS ACCEPTED BY THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT ORDER. THEREFORE, I AM OF THE CONSIDERED OPINION THAT THE REOPENING OF THE ASSESSMENT WITHOUT CHANGE IN MATERIAL FACT AND HAVING ANY FRESH INFORMA TION IN POSSESSION IS BASED ON MERE CHANGE OF OPINION ON THE SAME SET OF FACTS WHICH IS NOT PERMISSIBLE IN THE EYES OF LAW. 6. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 7. AT THE OUTSET, THE LD DR ARGUED THAT LD CIT(A) CA NCELLED THE ASSESSMENT WITHOUT GOING INTO THE MERITS OF THE CASE. SH E ARGUED THAT THERE WERE DETAILED REASONS FOR REOPENING THE ASSESSMENT . THE ASSESSEE HAD MADE WRONG CLAIM AND THEREFORE WHEN THIS FA CT CAME TO THE KNOWLEDGE OF ASSESSING OFFICER HE RIGHTLY INITIATED THE PROCEEDINGS ITA NO755/DEL/2013 9 U/S 147 OF THE ACT. CONTINUING HER ARGUMENTS SHE SUBMIT TED THAT ALTHOUGH DIVIDEND INCOME WAS THERE, NO PROPORTIONATE DISALLOWANCE OF EXPENSES WAS MADE BY THE ASSESSEE. AFTER READING EXPLANATI ON-2 TO SECTION 147, THE LD DR ARGUED THAT THE ASSESSEE HAD DELI BERATELY NOT DISCLOSED COMPLETE FACTS AND SUBMITTED THAT FACTS OF ESCA PEMENT OF INCOME CAME TO THE NOTICE OF DEPARTMENT THROUGH A R EPORT FROM AUDITOR AND THEREFORE THERE WAS FRESH MATERIAL AVAILA BLE WITH ASSESSING OFFICER AS THE INFORMATION WAS NOT THERE AT THE TIME OF PASSING OF ORIGINAL ASSESSMENT ORDER. SHE FURTHER ARGUED THAT LD C IT(A) HAS NOT DECIDED THE ISSUE ON MERITS AND IT WAS PRAYED THAT REOP ENING BE HELD LEGAL AS THERE WAS FRESH MATERIAL AND ISSUES BE DECIDED ON MERITS. 8. THE LD AR, ON THE OTHER HAND, SUBMITTED THAT ORIG INAL ASSESSMENT WAS COMPLETED U/S 143(3) AND NOTICE FOR REOPEN ING WAS GIVEN AFTER A PERIOD OF FOUR YEARS FROM THE CLOSE OF ASSESSMENT YEAR UNDER QUESTION. HIGHLIGHTING THE FACTS OF THE CASE TH E LD AR SUBMITTED THAT ASSESSING OFFICER REOPENED THE CASE ON ACCOUNT OF T WO REASONS I.E. ONE FOR RENT AND ANOTHER FOR DISALLOWANCE U/S 14A OF THE ACT. HE FURTHER SUBMITTED THAT BEFORE REOPENING OF THE CASE, THE CIT HAD ASSUMED JURISDICTION U/S 263 OF THE ACT AND HAD DIRECTED THE ASSESSING OFFICER TO PASS A FRESH ORDER AFTER MAKING THE DISALLOWANCE U/S 14A OF THE ACT. HE FURTHER SUBMITTED THAT THE SAID ORDER U/S 263 WAS QUASH ED BY HON'BLE TRIBUNAL AND OUR ATTENTION WAS INVITED TO PAPER BOOK PAGES 64 TO 75 WHERE A COPY OF TRIBUNALS ORDER WAS PLACED. HE FURTH ER ARGUED THAT IN RESPECT OF RENT, EVEN COMMISSIONER U/S 263 DID NOT RAISE ANY OBJECTION. THEREFORE, IN VIEW OF THE ABOVE, HE ARGUED THAT ORI GINAL ASSESSMENT WAS COMPLETED U/S 143(3) AND THEN AGAIN ASSESSMENT ORDER WAS MADE U/S 143(3) READ WITH SECTION 263/. OUR ATTENTION WAS INVITED TO PAPER BOOK PAGES 76 TO 78 WHERE A COPY OF QUESTIONNAIRE DAT ED 21.9.2004 WAS PLACED. HIGHLIGHTING FROM THE PAPER BOOK PAGE 76 , THE LD AR ITA NO755/DEL/2013 10 SUBMITTED THAT VIDE QUERY NO.2 THE ASSESSING OFFICER HAD ENQUIRED ABOUT THE RENT RECEIPTS AND HAD REQUIRED THE ASSESSEE TO SUBMIT THE NAME AND ADDRESSES OF TENANTS FROM WHOM RENT WAS RECEIV ED. IN REPLY, THE ASSESSEE HAD SUBMITTED THE COMPLETE DETAILS OF RENT R ECEIVED VIDE REPLY DATED 27.9.2004 PLACED AT PAPER BOOK PAGE 79. THE BREAK UP OF RENT IS AVAILABLE AT PAGE 82 OF THE PAPER BOOK. FROM PAGE 82, THE LD AR INVITED OUR ATTENTION TO RENT RECEIVED FROM SHRE E RAM SCHOOL AMOUNTING TO ` .24,68,000/- WHICH WAS FURNISHED TO THE ASSESSING OFFICER. 9. AS REGARDS THE SECOND REASON FOR REOPENING ON ACCOU NT OF NON DISALLOWANCE U/S 14A, THE LD AR TOOK US TO PAPER BOOK PAGES 90 TO 94 WHERE A COPY OF ASSESSEES LETTER DATED 22.12.2004 WAS P LACED. OUR ATTENTION WAS ALSO INVITED TO REPLY OF QUERY NO.9 PLA CED AT PAPER BOOK PAGE 92. OUR ATTENTION WAS ALSO INVITED TO PAPER BOOK PAGE 94 WHERE THE DETAILS OF DIVIDEND INCOME WAS PLACED. OUR ATTENT ION WAS ALSO INVITED TO PAPER BOOK PAGE 89 WHERE NOTING OF ORDER SHEET DATED 6.12.2004 WAS PLACED. OUR ATTENTION WAS ALSO INVITED T O SPECIFIC QUERY OF ASSESSING OFFICER AT SL. NO.9 FOR WHICH HE SUBMITTED THAT ASSESSEE HAD REPLIED VIDE LETTER DATED 22.12.2004. IN VIEW O F THE ABOVE EXPLANATION, THE LD AR ARGUED THAT SINCE THERE WAS SPE CIFIC QUERY AND THERE WAS SPECIFIC REPLY AND ALL THE INFORMATION WAS S UBMITTED AS REQUIRED BY THE ASSESSING OFFICER THEN THERE WAS NO QUE STION OF ANY FAILURE ON THE PART OF THE ASSESSEE. REGARDING LD DRS A RGUMENT THAT ISSUE BE DECIDED ON MERITS OF THE CASE, THE LD AR SUBMI TTED THAT REVENUE HAS NOT TAKEN ANY GROUND OTHER THAN THE LEGA L GROUND OF REOPENING. HE FURTHER SUBMITTED THAT ON MERITS ALSO, T HE CASE OF THE REVENUE WAS WEAK AND ARGUED THAT HON'BLE TRIBUNAL HA D HELD THAT DISALLOWANCE U/S 14A WAS NOT REQUIRED. HE FURTHER SUBMI TTED THAT BESIDES THE ADDITIONS MADE ON THE BASIS OF REASONS RECORDE D, THE ITA NO755/DEL/2013 11 ASSESSING OFFICER ALSO MADE ADDITION ON OTHER POINTS ALSO WHICH ITSELF CLARIFIES THAT THERE WAS NO OMISSION ON THE PART OF ASSESSE E TO FURNISH COMPLETE INFORMATION AND ASSESSING OFFICER WAS IMPROVING HIS CASE TIME AND AGAIN. RELIANCE IN THIS RESPECT WAS PLACED O N THE CASE LAWS RELIED BEFORE LD CIT(A) AND FURTHER RELIANCE WAS PLA CED ON THE CASE LAWS OF ACIT V. ICICI SECURITIES PRIMARY DEALERSHIP LT D. 348 ITR 299, MICROSOFT CORPORATION (I) (P) LTD. V. DCIT 90 DTR 33 AND M/S REPLIKA PRESS (P) LTD. V. ACIT 90 DTR 350 (DEL.). IN VIEW OF THE ABOVE, IT WAS ARGUED THAT ALL MATERIA L RELATING TO RENT WAS AVAILABLE WITH THE ASSESSEE. 10. IN HER REJOINDER, THE LD DR SUBMITTED THAT ASSESSEE HAD NOT DISCLOSED FULL PARTICULARS AND ASSESSEE OUGHT TO HAVE DECL ARED THAT THE PROPERTY WAS NOT IN ITS NAME. WITH RESPECT TO ARS ARG UMENTS ON THE ORDER OF TRIBUNAL IN WHICH ADDITION U/S 14A WAS DELET ED LD DR SUBMITTED THAT AFTER THE ORDER MUCH WATER HAS FLOWN A ND MANY THINGS HAVE CHANGED, SPECIFICALLY SHE RELIED UPON THE CASE LA W OF MAXOPP INVESTMENT DECIDED BY THE HON'BLE DELHI HIGH COURT R EPORTED IN 347 ITR 272. THEREFORE, IN VIEW OF THE ORDER OF HON'BLE DELHI HIGH COURT IN RESPECT OF MAXOPP INVESTMENT (SUPRA) SHE ARGUED THAT IT AT ORDER CANNOT BE RELIED UPON AND THEREFORE AGAIN ARGUED TH AT THE ISSUE BE DECIDED ON MERITS. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PA RTIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE CORE ISSUE IN THIS CASE IS REGARDING APPLICABILITY OF SECTION 147 OF THE ACT. SO, THEREFORE, IT IS SALUTARY ON OUR PART TO GO THROUGH T HE PROVISIONS OF SECTION 147 WHICH READS AS UNDER:- ITA NO755/DEL/2013 12 IF THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMEN T YEAR HE MAY SUBJECT TO PROVISIONS OF SECTIONS 148 TO 15 3 ASSESSED OR RE-ASSESSED SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT ORDER AND WHICH COMES TO HIS NOTICE. SUBSEQUENTLY, IN THE COURSE OF PROCEEDINGS UNDER THIS SECTION OR RECOMPUTED THE LOSS OR DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE AS THE CASE MAY BE FOR THE ASSESSMENT YEAR CONCERNED (HEREINAFTER IN TH IS SECTION AND IN SEC. 148 TO 153 REFERRED TO AS A RELEVANT ASSESSM ENT YEAR). PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE IN THE RELEVA NT ASSESSMENT YEAR NO ACTION SHALL BE TAKEN UNDER THIS SECTIO N AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF RELEVANT ASSE SSMENT YEAR UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF ASSESSEE TO MAKE A RETURN U/S 139 OR IN RESPO NSE TO A NOTICE ISSUED UNDER SUB SECTION (1) TO SECTION 142 OR SEC TION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. PROVIDED XXXXXXXXXXXXXXXX FROM THE PLAIN READING OF THIS SECTION IT IS APPARENT THAT THE PROVISIONS ARE APPLICABLE IN THE CASES OF ASSESSMENT U/S 143(3) ONLY IF THERE WAS A FAILURE ON THE PART OF ASSESSEE TO FURNISH AND DISCLOSE FU LL AND TRUE MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. NOW GOING TH ROUGH THE FACTS OF THE PRESENT CASE, WE FIND THAT ORIGINAL ASSESSME NT WAS ITA NO755/DEL/2013 13 COMPLETED U/S 143(3) VIDE ORDER DATED 31.3.2005. TH E ASSESSMENT YEAR UNDER CONSIDERATION IS ASSESSMENT YEAR 2002-03. THE TIME LIMIT REQUIRED FOR ISSUE OF NOTICE U/S 148 IS FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR WHICH IN THE PRESENT CASE IS ASSESSM ENT YEAR 2002-03 AND THE RELEVANT ASSESSMENT YEAR DURING WH ICH THE NOTICE FOR REOPENING COULD HAVE BEEN ISSUED EXPIRES ON 31.3.2007. THE NOTICE FROM ASSESSMENT YEAR 2002-03 FOR REOPENING IS D ATED 30.3.2009 WHICH IS AFTER A PERIOD OF FOUR YEARS. THE OTHER THI NG WE HAVE TO EXAMINE IS TO ASCERTAIN AS TO WHETHER THE ASSESSEE HAD FUR NISHED FULL AND TRUE MATERIAL TO THE ASSESSING OFFICER. FROM PAPER BOOK PAGE 76, WE FIND THAT ASSESSING OFFICER VIDE LETTER DATED 21.9. 2004 AT SL.NO.2 SPECIFICALLY REQUIRED THE ASSESSEE TO FURNISH NAME AND AD DRESSES OF THE TENANTS FROM WHOM RENT WAS RECEIVED. THE ASSESSEE HA D FURNISHED ALL THE DETAILS REGARDING NAMES AND ADDRESSES VIDE LETTE R DATED 27.9.2004 PLACED AT PAPER BOOK PAGES 79 TO 82. THE B REAK UP OF RENT RECEIVED IS AT PAGE 82. FROM THIS BREAK UP WE FIND TH AT THE AMOUNT OF ` .24,68,000/- HAS BEEN REFLECTED IN THIS BREAK UP. TH E ASSESSING OFFICER DURING ORIGINAL ASSESSMENT PROCEEDINGS HAS TREATED AN AM OUNT OF ` .11,05,55,980/- AS INCOME FROM OTHER SOURCES INSTEAD OF INCOME FROM HOUSE PROPERTY ON THE BASIS THAT THE PROPERTY WAS NOT O WNED BY THE ASSESSEE. THE AMOUNT THUS DISALLOWED AS INCOME FROM HOUSE P ROPERTY CONSISTED OF PROPERTY AT DLF CENTRE AS IS APPARENT FROM PAPER BOOK PAGE 82 WHERE THE DETAIL OF OTHER PROPERTY I.E. OF SHRI RAM SCHOOL IS ALSO PLACED. IF THE ASSESSING OFFICER HAD ASSESSED A PART OF INCOME FROM HOUSE PROPERTY AS INCOME FROM OTHER SOURCES ON THE BASIS OF CERTAIN MATERIAL HE WAS FREE TO MAKE ADDITION IN RESP ECT OF PROPERTY OF SHRI RAM SCHOOL ALSO WHICH HE DID NOT WHEREAS SAME MAT ERIAL WAS BEFORE HIM. THEREFORE, KEEPING IN VIEW ALL THESE FAC TS, WE ARE OF THE CONSIDERED OPINION THAT THERE WAS NO FAILURE ON THE P ART OF ASSESSEE AND THEREFORE REOPENING ON THE BASIS OF FIRST REASON WA S NOT JUSTIFIED. ITA NO755/DEL/2013 14 12. AS REGARDS THE SECOND REASON RECORDED, WE FIND THAT VIDE ORDER SHEET DATED 6.12.2004 , THE ASSESSEE WAS REQUIRED TO FURN ISH VIDE POINT NO.9 THE BREAK UP OF INTEREST AND DIVIDEND INC OME AND THEREFORE ASSESSEE VIDE LETTER DATE 22 ND DECEMBER, 2004 HAD FURNISHED DETAILS OF INTEREST AND DIVIDEND INCOME, THE BREAK UP OF WHICH IS PLACED AT PAPER BOOK PAGE 94. THE ASSESSEE HAD RECEIVED DIVIDEND INCOM E ONLY FROM ONE COMPANY I.E. DLF POWER LTD. THEREFORE, WE FIND THAT THIS INFORMATION WAS ALSO BEFORE THE ASSESSING OFFICER BEFORE PASSING OF THE ORIGINAL ASSESSMENT ORDER AS THE ASSESSEE HAD SUBMITTED COMP LETE PARTICULARS TO HIM AND NO FURTHER ENQUIRIES WERE SOUGH T BY THE ASSESSING OFFICER. THEREFORE, THE REOPENING ON ACCOUNT OF SECOND REASON WAS ALSO NOT JUSTIFIED AS THE FULL MATERIAL FACTS WERE BEFORE ASSESSING OFFICER AND THERE WAS NO FAILURE ON ITS PART. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES WE DO NOT SEE ANY INFIRMI TY IN THE ORDER OF LD CIT(A). 13. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. 14. ORDER PRONOUNCED IN THE OPEN COURT ON 23RD DAY OF AUGUST, 2013. SD/- SD/- (DIVA SINGH) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 23.8.2013. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT ITA NO755/DEL/2013 15 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). DATE OF HEARING 6.8.2013 DATE OF DICTATION 13.8.2013 DATE OF TYPING 4.8.2013 DATE OF ORDER SIGNED BY 23.08.2013 BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET & SENT TO THE BENCH CONCERNED.
