DCIT, Solan V. M/s Spray Engg. Devices, Baddi

ITA 829/CHANDI/2012

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2541 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 20-08-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 08-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Earning of tax free income; Wrong claim; Difference of opinion; Assessment record; Tax effect; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 244A; 147; 148; 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L. KARWA, HONBLE VICE PRESIDENT AND MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO.101/CHD/2013 ASSESSMENT YEAR: 2005-06 & ITA NO.829/CHD/2012 ASSESSMENT YEARS:2004-05 THE DCIT, VS. M/S SPRAY ENGG. DEVICES CIRCLE (NOW SPRAY ENGINEERING DEVICE LTD.) PARWANOO PLOT NO. 76, INDL. AREA BADDI PAN NO. AAKFS0646J (APPELLANT) (RESPONDENT) APPELLANT BY : SH. MANJIT SINGH RESPONDENT BY : SH. VINEET AGGARWAL DATE OF HEARING : 21/01/2016 DATE OF PRONOUNCEMENT : 22/01/2016 ORDER PER ANNAPURNA MEHROTRA A.M. BOTH THESE APPEALS HAVE BEEN FILED BY THE REVENUE A GAINST THE COMMON ORDER OF LD. CIT(A), SHIMLA DATED 14/05/2012. 2. AT THE OUTSET IT MAY BE STATED THAT THERE WAS A DELAY IN FILING THE APPEAL FOR ASSESSMENT YEAR 2005-06 BY 180 DAYS. AN APPLIC ATION FOR CONDONING THE DELAY WAS FILED BEFORE US WHICH READS AS UNDER: DCIT/PWN/2014-15/ DATED: 14/11/2014 TO, THE ASSTT. REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KENDRIA SADAN, SECTOR-9A, CHANDIGARH SIR SUB: ITA NO. 101/CHANDI/12-SPRAY ENGG. DEVICES (NOW SPRAY ENGINEERING DEVICE LTD.) PLOT NO. 76, INDLY. AREA, BADDI-FILLING OF CONDONATION OF DE LAY-REGARDING- 2 KINDLY REFER TO ABOVE. 2. IN THIS CONTEXT, IT IS SUBMITTED THAT THIS OFFIC E HAS RECEIVED AN ORDER FROM WORTHY COMMISSIONER OF INCOME-TAX (APPEALS), SHIMLA IN BOT H. A.Y. YEARS I.E. 2004-05 & 2005-06 AND THIS OFFICE HAS FILED AN APPEAL BEFORE YOUR OFFICE ON 08 /08/2012 FOR BOTH A.Y. I.E. 2004-05 & 2005-06. 3. VIDE O/O THE COMMISSIONER OF INCOME TAX(ITAT), CHANDIGARHS LETTER F.NO. CIT/ITAT/CHD/2012-13/1193 DATED 28/01/2013, THE HON BLE ITAT BENCH HAS DIRECTED THE APPEAL FOR A.Y. 2005-06 SHOULD BE FILED WITHIN 2 WEEK FROM TODAY AND MY PREDECESSOR HAS FILED THE APPEAL FOR A.Y. 2005-06 ON 06/02/2013. 4. IT IS HUMBLY PRAYED THAT DELAY IN FILING THE APP EAL FOR A.Y. 2005-06 MAY BE CONDONED AND THIS OFFICE WILL BE CAREFULLY IN FUTURE TO FILE ALL APPEALS IN TIME. YOURS FAITHFULLY SD/- (AMIT PRATAP SINGH) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE PARWANOO WE OBSERVE FROM THE SAME THAT ON THE EARLIER OCCASI ON A CONSOLIDATED APPEAL FOR TWO ASSESSMENT YEARS WAS FILED BY THE DEPARTMEN T WHICH ON THE DIRECTION OF THE BENCH WAS FILED SEPARATELY FOR 2005-06 AS ON 06 /02/2013. SINCE WE FIND THE REASON FOR DELAY IN FILING THE APPEAL TO BE SUFFICI ENT AND REASONABLE, WE HEREBY CONDONE THE SAME. 3. THE ISSUES INVOLVED IN BOTH THE APPEALS ARE COMM ON, THE SAME WERE HEARD TOGETHER AND FOR THE SAKE OF CONVENIENCE WE S HALL BE DEALING WITH APPEAL FILED IN ITA NO. 101/CHD/2013 FOR ASSESSMENT YEAR 2005-06. 4. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEALS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES, LD. CIT(A) H AS ERRED IN LAW IN HOLDING THAT THE MATERIAL FACTS USED IN THE FIRST P ROVISO TO SECTION 147 INVOLVED IN THE GIVEN CASE WERE FULLY AND TRULY DISCLOSED BY TH E APPELLANT, BY OVERLOOKING THE EXPLANATION 1 GIVEN U/S 147 OF THE ACT WHEREBY IT H AS BEEN CLARIFIED THAT PRODUCTION BEFORE THE A.O. OF ACCOUNT BOOKS OR OTH ER EVIDENCE FOR WHICH THE MATERIAL EVIDENCE, COULD, WITH DUE DILIGENCE HAVE B EEN DISCOVERED BY THE A.O WILL NOT NECESSARILY AMOUNT TO DISCLOSURE WITHIN TH E MEANING OF THE FORGOING PROVISO. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD C IT(A) HAS FURTHER ERRED IN LAW WHILE ALLOWING APPEAL OF THE ASSESSEE IS COM PLETE DISREGARD TO THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CI T VS. HONDA SIEL POWER PRODUCTS LTD. REPORTED IN 340 ITR 64 WHEREIN THE HO NBLE COURT HAVE CONFIRMED THE VIEW OF THE HIGH COURT IN UPHOLDING INITIATION OF REASSESSMENT PROCEEDINGS. 3. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A), THE SET ASIDE AND THAT OF A.O. RESTORED. 5. THE ONLY ISSUE INVOLVED IN THE PRESENT APPEAL IS AGAINST THE SETTING ASIDE / ANNULLING OF THE ASSESSMENT MADE U/S 147 / 143(3) O F THE INCOME TAX ACT, 1961. 3 6. BRIEF FACTS OF THE CASE FOR A.Y. 2005-06 ARE THA T THE ASSESSEE IS A MANUFACTURER OF SUGAR MACHINERY I.E. ENERGY SAVING DEVICES, MULTI GET CONDENSER, CONVEYER BELTS ETC. THE ORIGINAL ASSESSM ENT IN THE ASSESSEE CASE WAS COMPLETED U/S 143(3) OF THE ACT, ON 07.09.2007, WHE REIN ASSESSEES CLAIM FOR DEDUCTION U/S 80IC WAS ALLOWED. SUBSEQUENTLY THE CA SE WAS REOPENED U/S 147 OF THE ACT ON THE GROUND THAT THE ASSESSEE HAD RETU RNED BANK INTEREST OF RS. 16,15,858/- AND MISCELLANEOUS INCOME OF RS. 30,194/ - WHICH WAS NOT ELIGIBLE FOR DEDUCTION U/S 80IC OF THE ACT. THE OTHER REASONS FO R REOPENING THE ASSESSMENT WERE THAT THE RECEIPT OF TRANSPORTATION CHARGES AMO UNTING TO RS. 1,88,200/- HAD NOT BEEN RETURNED AND WAS FURTHER NOT ELIGIBLE FOR DEDUCTION U/S 80IC OF THE ACT, AND THE INTEREST U/S 244A AMOUNTING TO RS. 1,79,600 /- WAS NOT OFFERED FOR TAXATION. THE REASSESSMENT WAS COMPLETED ON 22.11.2 011 WHEREIN ADDITION OF RS. 16,45,779/- WAS MADE ON THE GROUND THAT THE INTERES T INCOME AND MISCELLANEOUS INCOME WAS NOT ELIGIBLE FOR DEDUCTION U/S 80IC OF THE ACT, AND FURTHER NO ADDITION ON ACCOUNT OF TRANSPORTATION CH ARGES AND INTEREST ON INCOME TAX REFUND WAS MADE SINCE THE SAME WAS FOUND TO HAVE BEEN DULY DISCLOSED AND ACCOUNTED FOR IN THE BOOKS OF THE ASS ESSEE. 7. BEFORE THE LD. CIT(A)THE ASSESSEE CHALLENGED THE VALIDITY OF THE REASSESSMENT PROCEEDINGS ON THE GROUND THAT THE REO PENING HAD BEEN RESORTED TO AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF T HE RELEVANT ASSESSMENT YEAR AND SINCE NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT HAS BEEN PO INTED OUT BY THE A.O. THE REASSESSMENT PROCEEDINGS WERE BAD. THE ASSESSEE ALS O CHALLENGED THE REASSESSMENT PROCEEDINGS ON THE GROUND THAT THE SAM E HAS BEEN RESORTED TO ON THE OBSERVATION OF THE AUDIT PARTY WHICH TANTAMOUNT ED TO CHANGE OF OPINION, WHICH WAS NOT ALLOWED U/S 147 OF THE ACT. LD. CIT(A ) AFTER CONSIDERING THE ASSESSEES SUBMISSIONS HELD THAT THE ACTION TAKEN B Y THE LD. A.O. U/S 147 WAS NOT SUSTAINABLE AND SET-ASIDE THE ASSESSMENT FRAMED U/S 147 FOR THE REASONS THAT ALL MATERIAL FACTS INVOLVED IN THE GIVEN CASE HAD BEEN TRULY AND FULLY DISCLOSED BY THE ASSESSEE AND THEREFORE, THE PROVISION OF SECTIO N 147 WERE NOT ATTRACTED IN THE CASE. LD. CIT(A) GAVE DETAILED FINDINGS AT PARA 4 TO 4.2 OF THE ITS ORDER WHICH ARE REPRODUCED HEREUNDER:- 4. THE RIVAL SUBMISSIONS HAVE BEEN CAREFULLY CONSIDERE D WITH REFERENCE TO THE FACTS OF THE CASE, THE RELEVANT ASSESSMENT RECORDS AND THE CASE LAW RELIED UPON. IT IS NOTED THAT IN THE REASONS RECORDED FOR RE-OPE NING THE ASSESSMENT U/S 147 THE LD. A.O. HAS TAKEN THE GROUND OF INTEREST INCOME, M ISC. INCOME, TRANSPORT RECEIPTS AND THE INTEREST ON INCOME TAX REFUND AS DETAILED I N THE FACTS OF THE CASE ABOVE. DURING THE COURSE OF RE-ASSESSMENT PROCEEDINGS, THE LD. A. O. FOUND THE CLAIM OF THE TRANSPORT RECEIPTS IN ORDER AND ALSO FOUND THE INTEREST ON INCOME TAX REFUND DULY ACCOUNTED FOR BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS. HE, HOWEVER, MADE 4 AN ADDITION OF RS. 16,45,779/- ON ACCOUNT OF INTERE ST INCOME AND MISC. INCOME HOLDING THAT THE SAME WAS NOT ELIGIBLE FOR DEDUCTIO N U/S 80IC OF THE ACT. IT IS FURTHER NOTED THAT THE SAID INTEREST INCOME AND THE MISC. INCOME WAS DULY REFLECTED BY THE APPELLANT IN THE PROFIT AND LOSS A CCOUNT SUBMITTED ALONGWITH THE RETURN OF INCOME. A PERUSAL OF THE RELEVANT ASSESSM ENT RECORDS SHOWS THAT THE APPELLANT HAD ALSO ATTACHED CERTAIN TDS CERTIFICATE S IN SUPPORT OF THE TAX DEDUCTED AT SOURCE BY BANK OF INDIA ON THE INTEREST INCOME OF THE APPELLANT. A PERUSAL OF THE ORIGINAL ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT ON 07.09.2007 FURTHER REVEALS THAT THE ID. A.O. HAD CH ECKED THE BOOKS OF ACCOUNTS PRODUCED BY THE ASSESSEE AND HAD ALSO SCRUTINIZED T HE FINANCIAL STATEMENTS, SUCH AS THE TRADING ACCOUNT AND THE PROFIT & LOSS ACCOUN T SUBMITTED BY THE ASSESSEE WITH ITS RETURN OF INCOME. IN FACT THE LD. A.O. HAD RAISED A NUMBER OF QUERIES VIDE LETTER DATED JAN. 17, 2006 IN RESPECT OF VARIOUS EX PENSES CLAIMED BY THE ASSESSEE IN ITS TRADING AND P &L ACCOUNT WHICH WAS DULY RESP ONDED TO BY THE ASSESSEE BY WAY OF SUBMISSIONS OF THE REQUISITE DETAILS. THEREF ORE, THERE IS NOTHING ON RECORD TO ESTABLISH THAT THE ASSESSEE HAD IN ANY MANNER FAILE D TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ITS ASSESSMENT FOR THE GIVEN ASSESSMENT YEAR. THERE IS NO DISPUTING THE FACT THAT NOTICE U/S 148 HAS BEEN ISSUED TO THE APPELLANT AFTER THE EXPIRY OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THE REASONS FOR RE-OPENING THE ASSESSMENT WERE RECORDED BY THE LD. A.O. ON 21.03.2011 AND THE NOTICE U/S 148 WAS ISSUED ON 31.03.2011 I.E. AT THE TIME OF THE EXPIRY OF THE 5TH YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THUS THE CASE OF THE APPELLANT IS SQUARELY COVERED BY THE FIRST PROVISO TO SECTION 147 OF THE ACT. SINCE THE APPELLANT HAD TRULY AND FULLY DISCLOSED ITS INT EREST INCOME AND MISC. INCOME, THE FAILURE TO EXAMINE THE SAME FROM THE POINT OF V IEW OF DEDUCTION U/S 80IC OF THE ACT IS FULLY ATTRIBUTABLE TO THE LD. A.O. NO AC TION U/S 147 CAN THEREFORE BE JUSTIFIED AFTER THE EXPIRY OF 4 YEARS WITHOUT THERE BEING ANY FAILURE ON THE PART OF THE APPELLANT. IT IS NOT THE LD. A.O.'S CASE THAT T HE APPELLANT HAD UNDERSTATED ITS INTEREST INCOME OR MISC. INCOME. SIMILARLY THE AP PELLANT HAD DULY FURNISHED THE TDS CERTIFICATE SHOWING THE RECEIPTS ON ACCOUNT OF TRANSPORTATION WORK ALONGWITH ITS RETURN OF INCOME WHICH WAS AVAILABLE ON RECORD TO THE A.O. THROUGHOUT THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE IT CANN OT BE INFERRED THAT THERE WAS ANY OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO SHOW THE RECEIPTS FROM TRANSPORTATION WORK. IT IS PERTINENT TO NOTE THAT N O DEFAULT WAS ULTIMATELY ESTABLISHED BY THE LD. A.O. ON THE PART OF THE ASSE SSEE ON THIS GROUND. IT IS ALSO NOTED THAT THE INTEREST INCOME OF RS.1,79,600/- EAR NED ON ACCOUNT OF INCOME TAX REFUND WAS ALSO DULY ACCOUNTED FOR BY THE ASSESSEE IN THE BOOKS OF ACCOUNTS WHICH WERE EXAMINED BY THE A. O. IN THE COURSE OF T HE ORIGINAL ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT. WHEN THE PRIMARY FACTS NECESSARY FOR ASSESSMENT WERE FULLY AND TRULY DISCLOSED BY THE AS SESSEE, THE LD. A.O. WAS NOT ENTITLED TO COMMENCE PROCEEDINGS FOR RE-ASSESSMENT AFTER THE EXPIRY OF 4 YEARS. THE POWER CONFERRED UPON THE ASSESSING OFFICER BY S ECTIONS 147 AND 148 IS NOT AN UNBRIDLED ONE. IT IS RATHER HEDGED WITH SEVERAL SAF EGUARDS CONCEIVED IN THE INTEREST OF ELIMINATING ROOM FOR ABUSE OF THIS POWE R BY THE A.O. THE FIRST PROVISO TO SECTION 147 IS ONE SUCH SAFEGUARD PROVIDED IN THE L AW. 4.1 IN THE INSTANT CASE ALL THE FACTS IN POSSESSION OF THE ASSESSEE WERE PLACED BEFORE THE TAXING AUTHORITY PRIOR TO THE FINALIZING OF THE ASSESSMENT. THEREFORE IT WAS NOT OPEN TO THE A. O. TO TURN AROUND AND SAY TH AT THE INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT. THE UNDER ASSESSMENT IS DUE TO THE LACHES ON THE PART OF THE ASSESSING OFFICER AND NOT DUE TO ANY OMISSIO N ON THE PART OF THE ASSESSEE. THE CASE OF THE ASSESSEE FALLS WITHIN THE AMBIT OF THE PROVISO TO SECTION 147 WHICH PROVIDES FOR TWO CONDITIONS. FIRSTLY THE A.O. MUST HAVE REASON TO BELIEVE THAT THE INCOME, PROFITS AND GAINS CHARGEABLE TO INCOME TAX HAVE ESCAPED ASSESSMENT, AND SECONDLY HE MUST ALSO HAVE REASON TO BELIEVE TH AT SUCH ESCAPEMENT HAS OCCURRED BY REASON OF EITHER OMISSION OR FAILURE ON THE PART OF THE ASSESSMENT TO DISCLOSE FULLY OR TRULY ALL MATERIAL FACTS NECESSAR Y FOR HIS ASSESSMENT OF THAT YEAR. 4.2 IN VIEW OF THE DISCUSSION ABOVE, IT IS CONCLUDE D THAT THE 'MATERIAL FACTS' USED IN THE FIRST PROVISO TO SECTION 147 INVOLVED IN THE GI VEN CASE WERE FULLY AND TRULY DISCLOSED BY THE APPELLANT. AS SUCH IN THE ABSENCE OF ANY SUPPRESSION, MISREPRESENTATION OR FALSIFICATION OF FACTS, IT CAN NOT BE SAID THAT THE PROVISIONS OF SECTION 147 ARE ATTRACTED IN THIS CASE. THE FAILURE LIES AT THE DOORSTEP OF THE LD. A.O. WHO OVERLOOKED THE IMPORTANT FACTS OF THE CASE . THEREFORE, THE ACTION TAKEN BY THE LD. A.O. U/S 147 OF THE ACT IS NOT FOUND SUS TAINABLE. ACCORDINGLY THE ASSESSMENT MADE U/S 147/143(3) IS SET-ASIDE/ANNULLE D. 5 8. AGGRIEVED BY THE SAME, THE REVENUE FILED THE PRE SENT APPEAL BEFORE US. 9. THE FACTS EMERGING IN THE PRESENT CASE ARE THAT THE NOTICE U/S 148 HAD BEEN ISSUED TO THE ASSESSEE ON 31.03.2011 I.E. AFTE R THE EXPIRY OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR I.E. A.Y. 2005- 06. FURTHER ASSESSMENT U/S 143(3) HAD BEEN FRAMED ON THE ASSESSEE VIDE ORDER D ATED 07.09.2007. 10. WE FIND THAT THE LD. CIT(A) ANNULLED THE REASSE SSMENT PROCEEDINGS FOR THE REASON THAT SINCE REASSESSMENT WAS INITIATED AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR AND ASSESSMENT U/S 143(3) HAD BEEN FRAMED ON THE ASSESSEE THE FIRST PROVISO TO SECTION 147 WAS ATTRACTED AND REASSESSMENT COULD BE INITIATED ONLY IF INCOME CHAR GEABLE TO TAX HAS ESCAPED ASSESSMENT BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT O F THE YEAR, WHICH WAS NOT THE CASE IN THE PRESENT APPEAL. 11. BEFORE US LD. DR STATED THAT ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT HAD NOT BEEN FULLY AND TRULY DISCLOSED BY THE ASSES SEE. LD. DR STATED THAT MERE PRODUCTION OF BOOKS OF ACCOUNTS DID NOT AMOUNT DISC LOSURE OF MATERIAL FACTS AS PER THE FIRST PROVISO TO SECTION 147 OF THE ACT. LD . DR DREW OUR ATTENTION TO EXPLANATION 1 TO SECTION 147 WHICH STATED LIKE WISE IN THIS REGARD. LD. DR FURTHER PLACED RELIANCE ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. HONDA SIEL POWER PRODUCTS LTD. VS. DCIT REPORTED AT 340 ITR 64. LD. DR ALSO PLACED RELIANCE ON THE DECISION OF JURISDICTIONAL H IGH COURT IN THE CASE JAWAND SONS VS. CIT OF 2010 326 ITR 39 (P&H). 12. LD. AR ON THE OTHER HAND REBUTTED THE ARGUMENT OF THE LD. DR AND STATED THAT ALL MATERIAL FACTS RELATING TO THE INCOME, WHI CH THE AO HAD REASON TO BELIEVE HAD ESCAPED ASSESSMENT, WERE DULY DISCLOSED BY THE ASSESSEE AND THEREFORE, BY VIRTUE OF THE FIRST PROVISO OF SECTIO N 147 THE REASSESSMENT PROCEEDINGS IN THE PRESENT CASE WERE NOT VALIDLY IN ITIATED. LD. AR DREW OUR ATTENTION TO THE COPY OF REASONS RECORDED FOR REOPE NING THE ASSESSMENT PLACED AT PB 60 OF PAPER BOOK AND POINTED OUT THAT THE REA SSESSMENT PROCEEDINGS HAD BEEN INITIATED SINCE THE AO HAD REASON TO BELIEVE T HAT INCOME FROM BANK INTEREST OF RS. 1,61,5585/- AND MISCELLANEOUS INCOM E OF RS. 30,194/-SHOWN IN THE PROFIT AND LOSS ACCOUNT HAD BEEN TAKEN INTO CONSIDE RATION FOR CLAIMING DEDUCTION U/S 80IC, WHICH WAS NOT AVAILABLE SINCE T HE SAME COULD NOT BE SAID TO THE INCOME DERIVED FROM INDUSTRIAL UNDERTAKING. FURTHER LD. AR POINTED OUT THAT THE REASONS FOR REOPENING ALSO STATED THAT INC OME FROM TRANSPORTATION AMOUNTING TO RS. 1,88,200/-AND INTEREST U/S 244A OF RS.1,79,600/- HAD NOT BEEN 6 OFFERED FOR TAX. LD. AR THEREAFTER STATED THAT THER E COULD BE NO CASE OF NON DISCLOSURE OF BANK INTEREST AND MISC. INCOME SINCE THE SAME WERE SEPARATELY AND CLEARLY DISCLOSED ON THE FACE OF THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE FOR THE YEAR, WHICH WAS THERE BEFORE THE A.O. DURIN G ASSESSMENT PROCEEDINGS. LD. AR STATED THAT EVEN AS PER THE REASONS RECORDED THE SAME WERE DULY DISCLOSED IN THE PROFIT AND LOSS ACCOUNT OF THE ASS ESEE AND THEREFORE, IT COULD NOT NOW BE SAID THAT THE ASSESSEE HAD NOT DISCLOSED THOSE FACTS DURING ASSESSMENT PROCEEDINGS. AS FOR THE TRANSPORTATION R ECEIPTS OF RS.1,88,200/- AND THE INTEREST INCOME OF RS. 1,79,600/- RECEIVED U/S 244A ON THE INCOME TAX REFUND, THE SAME HAD BEEN DULY DISCLOSED IN THE BOOKS OF TH E ASSESSEE WHICH HAD BEEN EXAMINED AND ACCEPTED BY THE A.O. ALSO DURING ASSES SMENT PROCEEDINGS ALSO AND THEREFORE, THERE WAS NO CASE OF NON DISCLOSURE OF THE SAME. LD. AR THEREFORE STATED THAT THE PROVISO TO SECTION 147 WAS NOT ATTR ACTED IN THE IMPUGNED CASE AND THE REASSESSMENT PROCEEDINGS HAD BEEN RIGHTLY S ET ASIDE BY THE LD. CIT(A). LD. AR FURTHER RELIED UPON THE FINDINGS OF THE LD. CIT(A) AND THE DECISIONS OF THE APEX COURT IN THE CASE OF CIT VS. CORPORATION BANK LTD. REPORTED THAT 254 ITR 791 IN SUPPORT OF ITS CONTENTIONS. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PE RUSED THE ORDERS OF THE AUTHORITIES BELOW AND ALSO THE DOCUMENTS PLACED BEF ORE US. 14. WE FIND THAT THE INCOME WHICH HAD ESCAPED ASSES SMENT AS PER THE REASONS RECORDED ARE THE FOLLOWING:- A) MISCELLANEOUS INCOME RS. 30,194/- B) BANK INTEREST RS. 16,15,858/- C) TRANSPORTATION CHARGES RS. 1,88,200/- D) INTEREST U/S 244A RS. 1,79,600/- AS FAR AS INCOME AT POINT NO. (C) & (D) IS CONCERNE D, WE FIND THAT THE A.O. HIMSELF HAS FOUND THAT THE SAME WERE DULY DISCLOSED BY THE ASSESSEE AND THERE WAS THEREFORE NO ESCAPEMENT OF THESE INCOMES FROM TAXATION. AS FOR MISCELLANEOUS INCOME AND BANK INTEREST REFERRED IN POINT (A) & (B) ABOVE RESPECTIVELY, WE FIND THAT THE MATERIAL FACTS REQUIRED TO BE DISCLOSED BY THE ASSESSEE FOR THE PURPOSE OF ASSESS MENT WAS THE QUANTUM OF INCOME EARNED UNDER THE RESPECTIVE HEADS. FROM T HE DISCLOSURE OF THIS MATERIAL FACT ITSELF, EITHER IN THE RETURN OF INCOM E OR DURING ASSESSMENT PROCEEDINGS, THE A.O. COULD HAVE DISALLOWED DEDUCTI ON U/S 80IC OF THE ACT, SINCE HE WOULD HAVE BEEN AWARE OF THE FACT THA T THE ASSESSEE HAD 7 EARNED INCOME FROM INTEREST ON REFUND AND MISCELLAN EOUS INCOME WHICH HAS NO NEXUS WITH THE UNDERTAKING OF THE ASSESSEE A ND WAS THEREFORE, NOT ELIGIBLE FOR DEDUCTION U/S 80IC OF THE ACT. WE FIND THAT THIS FACT WAS DULY DISCLOSED IN THE PROFIT AND LOSS ACCOUNT OF THE ASS ESSEE, WHERE THE TWO INCOMES HAVE BEEN SEPARATELY SHOWN. THIS PROFIT AND LOSS ACCOUNT WAS BEFORE THE A.O. DURING ASSESSMENT PROCEEDINGS. FURT HER WITH RESPECT TO INTEREST INCOME, TDS CERTIFICATES IN SUPPORT OF THE TAX DEDUCTED AT SOURCE, THEREON WERE FILED DURING ASSESSMENT PROCEEDINGS AS POINTED OUT BY LD. CIT(A) IN PARA4 OF HIS ORDER. THEREFORE, WE FIND T HAT ALL MATERIAL FACTS RELATING TO THE IMPUGNED INCOMES HAD BEEN DULY DISC LOSED BY THE ASSESSEE DURING ASSESSMENT PROCEEDINGS AND BASED ON THESE FACTS LD. A.O. COULD HAVE DISALLOWED DEDUCTION U/S 80IC CLAIM ED BY THE ASSESSEE ON THESE INCOMES DURING ASSESSMENT PROCEEDINGS ITSE LF. NO FURTHER FACT WAS REQUIRED TO BE DISCLOSED BY THE ASSESSEE IN THI S REGARD. IN FACT EVEN IN THE REASONS RECORDED FOR REOPENING, IT IS ON THE BA SIS OF MATERIAL FACTS WHICH WERE THERE BEFORE THE A.O. DURING ASSESSMENT PROCEEDINGS, THAT REOPENING WAS SOUGHT TO BE RESORTED TO. NO NEW FACT HAS BEEN BROUGHT TO LIGHT BY THE A.O., WHICH WAS NOT EARLIER DISCLOSED BY THE ASSESSEE, PROMPTING HIM TO REOPEN THE ASSESSES CASE. THEREFORE, WE CONCUR WITH THE LD. CIT(A) FINDINGS T HAT THE REASSESSMENT PROCEEDINGS WERE NOT VALIDLY INITIATED SINCE THERE WAS NO SUPPRESSION OR MISREPRESENTATION OF MATERIAL FACTS BY THE ASSESSEE . 15. IN VIEW OF THE DETAILED DISCUSSION ABOVE WE FIN D NO MERIT IN THE ARGUMENT OF THE LD. DR THAT LD. CIT(A) HAD OVERLOOK ED EXPLANATION 1 TO SECTION 147 WHEREIN IT HAS BEEN STATED THAT MERE PR ODUCTION BEFORE THE A.O. OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH THE MATERIAL EVIDENCE COULD WITH DUE DILIGENCE HAVE BEEN DISCOVE RED BY THE A.O. WILL NOT NECESSARILY AMOUNT TO DISCOVERED WITHIN THE MEA NING OF THE FIRST PROVISO TO SECTION 147. IN THE PRESENT AS STATED AB OVE ALL MATERIAL FACTS WERE THERE BEFORE THE A.O., AND THERE WAS NO NEED F OR THE A.O. TO EXERCISE ANY DILIGENCE FOR DISCOVERING THE SAME. FU RTHER WE FIND THAT THE RELIANCE PLACED BY LD. DR ON THE JUDGMENT OF THE AP EX COURT IN HONBLE SIEL POWER PRODUCTS LTD. 340 ITR 64, IS MISPLACED, SINCE THE FACTS IN THAT CASE ARE MATERIALLY DIFFERENT FROM THE PRESENT CASE AS IN THAT CASE THERE 8 WAS AN OMISSION AND FAILURE ON THE PART OF THE ASSE SSEE TO POINT OUT EXPENSES RELATABLE TO TAX FREE / EXEMPT INCOME, WHI CH WERE CLAIMED AS DEDUCTION AND HENCE THE REASSESSMENT PROCEEDINGS WE RE HELD TO BE VALID. IN VIEW OF THE ABOVE WE HOLD THAT THE REASSESSMENTS PROCEEDINGS WERE NOT VALID IN THE PRESENT CASE AND THE SAME HAD BEEN RIGHTLY SET ASIDE / ANNULLED BY THE LD. CIT(A). 16. THE APPEAL OF THE REVENUE IS THEREFORE DISMISSE D. ITA NO. 829/CHD/2012 17. THE FACTS FOR A.Y. 2004-05 ARE SIMILAR TO THAT OF A.Y. 2005-06, WITH THE ONLY DIFFERENCE THAT IN A.Y. 2004-05 THE ISSUE OF TRANSP ORT RECEIPT AND INTEREST ON REFUND IS NOT INVOLVED. ON THE OTHER HAND THE ISSUE OF BANK INTEREST AS PER TDS CERTIFICATE WERE TAKEN ALONG WITH THE COMMON ISSUE OF BANK INTEREST BEING NOT ELIGIBLE FOR DEDUCTION U/S 80IC OF THE ACT. THE REA SONS FOR REOPENING STATED THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S 80IC ON PROF ITS WHICH INCLUDED BANK INTEREST OF RS. 7,46,196/- WHICH WAS NOT ADMISSIBLE U/S 80IC OF THE ACT. FURTHER REASONS STATED THAT AS PER TDS CERTIFICATE ISSUED B Y THE BANK THE ASSESSEE HAD EARNED BANK INTEREST AMOUNTING TO RS. 1,99,412/- (T DS DEDUCTION RS. 20,938/-), BUT THIS INCOME HAD NOT BEEN TAKEN INTO ACCOUNT, WH ILE COMPUTING THE TOTAL INCOME THOUGH THE TDS CREDIT HAD BEEN CLAIMED BY TH E ASSESSEE. THEREAFTER ASSESSMENT WAS FRAMED DISALLOWING THE CLAIM OF DEDU CTION U/S 80IC ON BANK INTEREST AMOUNTING TO RS. 7,46,196/- AND MAKING ADD ITIONS OF RS. 1,99,412/- BEING BANK INTEREST EARNED BY THE ASSESSEE. 18. LD. CIT(A) HELD THAT THE INTEREST INCOME OF RS. 1,99,412/- PERTAINED TO A.Y. 2003-04 AND THEREFORE COULD NOT BE TAKEN AS GROUND FOR REOPENING THE ASSESSMENT FOR A.Y. 2004-05. LD. CIT(A) FURTHER HEL D THAT ANY WRONG CLAIM OF TDS MADE BY THE ASSESSEE COULD HAVE BEEN RECTIFIED IN P ROCEEDINGS U/S 154 OF THE ACT. FURTHER LD. CIT(A) HELD THAT AS IN THE CASE OF A.Y. 2005-06 ALL MATERIAL FACTS HAS BEEN DULY REFLECTED BY THE ASSESSEE AND THEREFO RE, THE PROVISIONS OF SECTION 147 WERE NOT ATTRACTED. THE ASSESSMENT MADE WAS THE REFORE SET ASIDE / ANNULLED BY THE CIT(A). THE RELEVANT FINDING OF THE LD. CIT(A) GIVEN AT PARA 5 TO 5.1 OF ITS ORDER ARE REPRODUCED HEREUNDER:- 5. THE FACTS OF THE CASE FOR THE A.Y. 2004-05 ARE SIMILAR TO THAT OF A.Y. 2005-06 DISCUSSED ABOVE. THERE IS ONLY A SLIGHT DIFFERENCE IN THE FACTS OF THE CASE. WHILE IN 9 THE A.Y. 2005-06, THE ISSUE OF TRANSPORT RECEIPTS A ND INTEREST ON REFUND WAS INVOLVED, IN THE A.Y. 2004-05, THE ISSUE OF BANK IN TEREST AS PER THE TDS CERTIFICATE WAS TAKEN UP. THE OTHER MAIN ISSUE REGARDING THE IN COME ON ACCOUNT OF BANK INTEREST BEING NOT ELIGIBLE FOR DEDUCTION U/S 80IC OF THE ACT IS COMMON FOR THE BOTH THE ASSESSMENT YEARS. IT IS NOTED FROM THE REL EVANT ASSESSMENT RECORD THAT THE SO-CALLED INCOME OF RS. 1,99,4121- AS PER THE T DS CERTIFICATE ISSUED BY BANK OF INDIA SECTOR -16, PANCHKULA PERTAINS TO THE A.Y. 20 03-04 (F.Y. 2002-03) AND NOT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THE TAX DE DUCTED AT SOURCE AMOUNTING TO RS.20,938/- WAS ALSO DEPOSITED BY THE BANK INTO THE CENTRAL GOVT. ACCOUNT WITH SBOP, SECTOR-7, PANCHKULA ON 31.03.2003. THUS IT IS NOT UNDERSTOOD AS TO HOW THE LD. A.O. COULD TAKE THE INCOME, IF ANY, OF THE A.Y. 2003-04 AS THE GROUND FOR RE-OPENING THE ASSESSMENT OF THE A.Y. 2004-05. FURT HER THE SAID TDS CERTIFICATE WAS DULY FURNISHED BY THE ASSESSEE ALONGWITH ITS RETURN OF INCOME AND WAS THROUGHOUT AVAILABLE ON RECORD TO THE A.O. DURING THE COURSE O F ASSESSMENT PROCEEDINGS. IT WAS FOR THE A.O. TO EXAMINE THE TDS CLAIM OF THE AS SESSEE W.R.T. THE INCOME RETURNED. EVEN THEN IF AT ALL THERE WAS NOTICED SUB SEQUENTLY ANY WRONG CLAIM OF THE EXCESS TDS BY THE ASSESSEE, THE SAME COULD HAVE BEEN TAKEN CARE OF U/S 154 OF THE IT. ACT. BUT THE INFORMATION AVAILABLE AS PE R THE GIVEN TDS CERTIFICATE COULD NOT HAVE BEEN LEGITIMATELY MADE THE BASIS OF INITIA TION OF PROCEEDINGS U/S 147 OF THE ACT. WITHOUT PREJUDICE TO THE SAID FINDINGS, IT IS ALSO NOTED THAT THE LD. A.O., WHILE MAKING THE RE-ASSESSMENT, HAS NOT REBUTTED TH E SUBMISSIONS MADE BY THE APPELLANT IN THIS REGARD. THE LD. A.O. HAS SIMPLY T REATED THE AMOUNT OF RS.1,99,412/-AS THE INCOME OF THE ASSESSEE WITHOUT GIVING ANY REASONS. 5.1 IN VIEW OF THE DISCUSSION IN RESPECT OF THE A.Y . 2005-06 IN THE FOREGOING PARAGRAPHS, THE INITIATION OF PROCEEDINGS U/S 147 O F THE ACT FOR THE A.Y. 2004-05 IS ALSO NOT FOUND LEGALLY TENABLE. THE RE-ASSESSMENT M ADE AS A CONSEQUENCE THEREOF IS ACCORDINGLY SET-ASIDE/ANNULLED. AGGRIEVE D BY THE SAME THE REVENUE FILED BY THE PRESENT APPEAL BEFORE US:- 19. AGGRIEVED BY THE SAME, THE REVENUE FILED THE PRESEN T APPEAL BEFORE US. 20. WE FIND THAT SINCE THE FACTS AND ISSUES INVOLVE D IN THIS APPEAL ARE IDENTICAL TO ITA NO. 101/CHD/2013, THE FINDING GIVE N BY US IN ITA NO. 101/CHD/2013 WILL APPLY MUTATIS MUTANDIS. 21. WE ALSO OBSERVED THAT IN EACH APPEAL TITLED HEREIN ABOVE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMIT OF RS . 10 LAKHS. THUS, IN VIEW OF CIRCULAR NO. 21/2015 DATED 10.12.2015, F .NO. 279/MISC.142/2007-ITJ(PT), GOVERNMENT. OF INDIA, MI NISTRY OF FINANCE, DEPARTMENT OF REVENUE, CENTRAL BOARD OF DIRECT TAXE S, THE INSTANT APPEALS DESERVES TO BE TREATED AS WITHDRAWN / NOT P RESSED. VIDE PARA 10 OF THE ABOVE INSTRUCTIONS, THE CBDT HAS CLA RIFIED THAT THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING A PPEALS AND APPEALS TO BE FILED HENCEFORTH IN ITAT. THE CBDT H AS FURTHER CLARIFIED THAT THE PENDING APPEALS BEFORE THE TRIBUNAL BELOW THE SPECIFIED TAX LIMITS I.E. RS. 10 LAKHS MAY BE WITHDRAWN / NOT PRESSED BY THE 10 REVENUE. IT IS ALSO OBSERVED THAT THE ISSUE INVOLV ED IN THESE APPEALS ARE NOT COVERED BY PARA 8 (EXCEPTIONS) OF THE ABOVE INSTRUCTIONS. ACCORDINGLY, THE APPEALS FILED BY THE REVENUE ARE T REATED AS WITHDRAWN / NOT PRESSED. 22. IN THE RESULT BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/01/2016. SD/- SD/- (H.L. KARWA) (ANNAPURNA MEHROTRA) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 22/01/2016 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR