Rani Printers P Ltd., CHENNAI V. DCIT, CHENNAI

ITA 757/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6468 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 05-07-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 28-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S NATARAJA
• Assessee Lawyers: S SRIDHAR
• Keywords: Reopening of assessment
• Section: 143(3); 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , , ' # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.757/MDS/2017 & '& / ASSESSMENT YEAR : 2006-07 M/S RANI PRINTERS PVT. LTD., 1091, EVR HIGH ROAD, VEPERY, CHENNAI - 600 007. PAN : AAACR 1416 Q V. THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE V(3), CHENNAI - 600 034. ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE +,)* - . / RESPONDENT BY : SHRI S. NATARAJA, JCIT / - 0' / DATE OF HEARING : 05.07.2017 12' - 0' / DATE OF PRONOUNCEMENT : 03.08.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 3, CHENN AI, DATED 30.12.2016 AND PERTAINS TO ASSESSMENT YEAR 2006-07. 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS REOP ENING OF ASSESSMENT UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.A. NO.757/MDS/2017 3. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THE ASSESSEE FILED THE RETURN OF INCOME FOR AS SESSMENT YEAR 2006-07 ON 21.03.2007 ADMITTING A TOTAL INCOME OF ` 98,98,641/-. THE RETURN WAS SELECTED FOR SCRUTINY AND ORDER WAS PASSED UNDER SECTION 143(3) OF THE ACT ON 26.12.2008 ACCEPTING T HE INCOME RETURNED BY THE ASSESSEE. SUBSEQUENTLY, THE ASSESS ING OFFICER EXAMINED THE RECORD ONCE AGAIN AND FOUND THAT THE M EMORANDUM OF UNDERTAKING DATED 05.10.2005, WHEREBY THE ASSESSEE- COMPANY WAS TAKEN OVER BY M/S MALABAR PUBLICATIONS, AMOUNTS TO TRANSFER OF KNOWHOW, TRADEMARK, COMMERCIAL RIGHTS, ETC. ACCORD ING TO THE LD. COUNSEL, THE ASSESSING OFFICER FOUND THAT IT IS ONL Y A SLUMP SALE, THEREFORE, THE PROFIT HAS TO BE ASSESSED UNDER SECT ION 50B OF THE ACT FOR SHORT TERM CAPITAL GAIN. ACCORDINGLY, THE ASSESSING OFFICER FOUND THAT THERE WAS ESCAPEMENT OF INCOME. ACCORDI NG TO THE LD. COUNSEL, FOUR YEAR PERIOD EXPIRED FROM THE END OF T HE RELEVANT ASSESSMENT YEAR AND THE ASSESSMENT ORDER WAS ALSO P ASSED UNDER SECTION 143(3) OF THE ACT. ACCORDING TO THE LD. CO UNSEL, IT IS NOT A CASE THAT THERE WAS NEGLIGENCE ON THE PART OF THE A SSESSEE IN DISCLOSING THE RELEVANT MATERIAL FOR ASSESSMENT. T HE ASSESSING OFFICER, ON PERUSAL OF RECORDS ALREADY FILED BY THE ASSESSEE, FOUND 3 I.T.A. NO.757/MDS/2017 THAT THERE WAS ESCAPEMENT OF INCOME. IN THE ABSENC E OF ANY ALLEGATION THAT THE ASSESSEE FAILED TO FILE THE NEC ESSARY MATERIAL BEFORE THE ASSESSING OFFICER FOR COMPLETING THE ASS ESSMENT, ACCORDING TO THE LD. COUNSEL, THE ASSESSMENT CANNOT BE REOPENED AFTER EXPIRY OF FOUR YEARS IN VIEW OF PROVISO TO SE CTION 147 OF THE ACT. 4. ON THE CONTRARY, SHRI S. NATARAJA, THE LD. DEPAR TMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE CLAIMED THE SALE TO M/S MALABAR PUBLICATIONS AS SLUMP SALE UNDER SECTIO N 50B OF THE ACT. HOWEVER, THE ASSESSING OFFICER ON EXAMINATION OF RECORDS, FOUND THAT THE TRANSACTION CANNOT BE CONSIDERED AS SLUMP SALE. AT THE BEST, ACCORDING TO THE LD. D.R., IT CAN BE CONS IDERED AS SALE OF TRADEMARK AND OTHER COMMERCIAL RIGHTS UNDER SECTION 50 OF THE ACT, THEREFORE, THE CAPITAL GAIN HAS TO BE ASSESSED SINC E THE RETURN WAS ACCEPTED WITHOUT EXAMINING. ONLY NOW THE ASSESSING OFFICER FOUND THAT THERE WAS ESCAPEMENT OF INCOME. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. WE HAVE CAREFULLY GONE THROUGH THE PROVISO TO SECTION 147 O F THE ACT. IT IS NOT IN DISPUTE THAT FOUR YEARS PERIOD EXPIRED FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION. THE ASSESSMENT 4 I.T.A. NO.757/MDS/2017 WAS ALSO COMPLETED UNDER SECTION 143(3) OF THE ACT. THEREFORE, UNLESS THERE IS NEGLIGENCE ON THE PART OF THE ASSES SEE IN PRODUCING NECESSARY MATERIAL BEFORE THE ASSESSING OFFICER FOR COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER CANNOT REOPEN THE ASSESSMENT. IN THIS CASE, IT IS NOT THE CASE OF THE REVENUE THA T THE ASSESSEE HAS FAILED TO FILE NECESSARY MATERIAL FOR COMPLETING TH E ASSESSMENT UNDER SECTION 143(3) OF THE ACT. IN FACT, THE ASSE SSING OFFICER RE- EXAMINED THE MATERIAL ALREADY AVAILABLE ON RECORD A ND FOUND THAT THE INCOME HAS ESCAPED ASSESSMENT. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT REOPENING OF ASSESSMENT IS BARRED BY LIMITATION, THEREFORE, THE CONSEQUENTIAL ORDER CANN OT STAND IN THE EYE OF LAW. THE ASSESSMENT ORDER PASSED UNDER SECTION 148 OF THE ACT IS QUASHED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED ON 3 RD AUGUST, 2017 AT CHENNAI. SD/- SD/- ( ) ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) ' / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 3 RD AUGUST, 2017. 5 I.T.A. NO.757/MDS/2017 KRI. - +056 76'0 /COPY TO: 1. )* /APPELLANT 2. +,)* /RESPONDENT 3. / 80 () /CIT(A)-3, CHENNAI-34 4. PRINCIPAL CIT- 5, CHENNAI 5. 69 +0 /DR 6. :& ; /GF.