Appeal Details
Counselvise Citation
[2017] 128 COUNSELVISE.COM (IT) 5076 (ITAT-CHANDIGARH)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 7 month(s) 22 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
05-07-2017
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
Not Allotted
Assessment Year
2009-2010
Appeal Filed On
13-11-2015
Judgement Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NOS. 829 & 830/CHD/2015 ASSESSMENT YEARS: 2008-09 & 2009-10 HARYANA TOURISM CORPORATION LTD., VS. THE DCIT, PAN CHKULA CIRCLE, CHANDIGARH PANCHKULA PAN NO. AAACH4108B & ITA NO. 656/CHD/2016 ASSESSMENT YEAR: 2007-08 HARYANA TOURISM CORPORATION LTD., VS. THE DCIT, PAN CHKULA CIRCLE, CHANDIGARH PANCHKULA PAN NO. AAACH4108B (APPELLANT) (RESPONDENT) APPELLANT BY : SH. HARISH NAYYAR RESPONDENT BY : SH. RAVI SARANGAL DATE OF HEARING : 24.05.2017 DATE OF PRONOUNCEMENT : 05.07.2017 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE CAPTIONED APPEALS HAVE BEEN PREFERRED BY THE ASSESSEE AGAINST THE SEPARATE ORDERS OF COMMISSIONE R OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS CIT(A)], PAN CHKULA DATED 4.3.2016 2 (FOR ASSESSMENT YEAR 2007-08) AND 24.8.2015 (FOR A SSESSMENT YEARS 2008-09 & 2009-10) RESPECTIVELY. SINCE THE FACTS A ND THE ISSUE INVOLVED THEREIN ARE IDENTICAL, THEREFORE, THE SAME WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON O RDER. THE ASSESSEE IN THIS APPEAL INTER ALIA HAS RAISED A LEG AL ISSUE REGARDING THE VALIDITY OF REOPENING OF THE ASSESSMENT U/S 147 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') BESIDES THAT THE ACT ION OF THE LOWER AUTHORITIES IN CONFIRMING THE ADDITION TO THE TAXAB LE INCOME OF THE ASSESSEE ON ACCOUNT OF DISALLOWANCE OF ADDITIONAL D EPRECIATION CLAIMED ON PLANT AND MACHINERY. 2. BEFORE GOING INTO MERITS OF THE CASE, WE DEEM IT APPROPRIATE TO HEAR THE PARTIES ON THE LEGAL ISSUE RELATING TO THE VALIDITY OF THE REOPENING OF THE ASSESSMENT AS THE SAME IS THE VERY BASIS FOR THE SUBSEQUENT ADDITION MADE BY THE ASSESSING OFFICER. SO FAR AS THE REOPENING OF THE ASSESSMENT IN RELATION TO THE ASSE SSMENT YEARS 2007- 08 AND 2008-09 IS CONCERNED; THE ORIGINAL ASSESSMEN T U/S 143(3) HAD BEEN CARRIED OUT AS SCRUTINY ASSESSMENT U/S 143(3) OF THE ACT AND CERTAIN ADDITIONS WERE MADE BY THE ASSESSING OFFICE R. HOWEVER, THE MATTER FOR BOTH THE ASSESSMENT YEARS WAS CARRIED OU T IN APPEAL BEFORE THE CIT(A) AND THEN TO THE TRIBUNAL AND ON THE BASI S OF THE ORDER OF THE TRIBUNAL, THE INCOME OF THE ASSESSEE FOR THE AB OVE STATED ASSESSMENT YEARS WAS ASSESSED AT RETURNED INCOME. T HEREAFTER, A NOTICE DATED 7.2.2014 U/S 148 OF THE ACT TO REOPEN THE ASSESSMENT HAD BEEN ISSUED BY THE ASSESSING OFFICER OBSERVING THAT THE INCOME OF THE ASSESSEE FOR THE ABOVE STATED RELEVANT YEARS HAD E SCAPED ASSESSMENT 3 BECAUSE OF THE EXCESS ALLOWANCE OF DEPRECIATION ON PLANT AND MACHINERY. THE NOTICE FOR REOPENING IN RELATION TO ABOVE SAID BOTH THE ASSESSMENT YEARS I.E. 2007-08 AND 2008-09 HAS BEEN DONE AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT A SSESSMENT YEAR. IN THE REASONS RECORDED BY THE ASSESSING OFFICER, THER E IS NO MENTION THAT THERE WAS ANY FAILURE ON THE PART OF THE ASSES SEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASS ESSMENT FOR THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION. THE R EOPENING IN THIS CASE, THUS, IS SQUARELY HIT BY THE SECOND PROVISO T O SECTION 147 OF THE ACT. A PERUSAL OF THE REASONS RECORDED BY THE ASSE SSING OFFICER REVEALS THAT THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT BY RE- APPRECIATION OF THE MATERIAL ALREADY AVAILABLE ON R ECORD. IN VIEW OF THE THIS, THE VALIDITY OF THE REOPENING IN RELATION TO THE ABOVE STATED ASSESSMENT YEARS 2007-08 AND 2008-09 BEING HIT BY S ECOND PROVISO TO SECTION 147 OF THE ACT AND IS, THEREFORE, QUASHED. SO FAR AS THE REOPENING OF THE ASSESSMENT FOR ASSESSMENT YEAR 200 9-10 IS CONCERNED, THE SAME HAS BEEN DONE ON TWO ISSUES, FI RSTLY THE EXCESS CLAIM OF ALLOWANCE OF LEAVE ENCASHMENT AND SECONDLY EXCESS CLAIM OF DEPRECIATION ON PLANT AND MACHINERY. THOUGH ASSESSM ENT HAS BEEN REOPENED WITHIN 4 YEARS FROM THE END OF THE RELEVAN T ASSESSMENT YEAR, BUT THE SAME, IN OUR VIEW, IS NOT VALID BECAUSE OF THE REASONS THAT NO FRESH TANGIBLE MATERIAL HAS COME TO THE POSSESSION OR KNOWLEDGE OF THE ASSESSING OFFICER FOR TRIGGERING THE REOPENING OF THE ASSESSMENT. THE RE-OPENING IN THIS CASE HAS BEEN DONE BY THE AS SESSING OFFICER ON THE BASIS OF RE-APPRECIATION OF THE RECORD. ADMITTE DLY, NO FRESH TANGIBLE MATERIAL CAME INTO THE POSSESSION OF THE A SSESSING OFFICER 4 TO FORM A BELIEF THAT THE INCOME OF THE ASSESSEE H AS ESCAPED ASSESSMENT. THE COURTS OF LAW, TIME AND AGAIN, HAV E HELD THAT A REASON TO BELIEVE THAT THE INCOME OF THE ASSESSEE H AS ESCAPED ASSESSMENT SHOULD BE BASED ON SOME TANGIBLE MATERIA L WHICH COMES TO THE KNOWLEDGE OF THE ASSESSING OFFICER. AN ASSESSM ENT CANNOT BE REOPENED UNDER SECTION 147 OF THE ACT ON THE BASIS OF MERE SUSPICION OR CHANGE OF OPINION. IN THIS CASE, THE ORIGINAL A SSESSMENT U/S 143(3) OF THE ACT HAD ALREADY BECOME FINAL. . THE HON'BLE DEL HI HIGH COURT IN A VERY RECENT CASE INDU LATA RANGWALA VS. DCIT (2017 ) 80 TAXMAN.COM 102 (DELHI) AFTER DELIBERATING ON VARIO US AUTHORITIES INCLUDING THAT OF THE HON'BLE SUPREME COURT AND OTH ER HIGH COURTS HAS CONCLUDED THAT IN A CASE WHERE INITIALLY ASSESS MENT ORDER IS PASSED U/S 143(3) AND THE ASSESSMENT IS SOUGHT TO B E REOPENED WITHIN FOUR YEARS FROM THE EXPIRY OF THE RELEVANT ASSESSM ENT YEAR, THE ASSESSING OFFICER HAS TO BASE HIS REASONS TO BE LIEVE THAT INCOME HAS ESCAPED ASSESSMENT ON SOME FRESH TANGIBLE MATER IAL THAT PROVIDES THE NEXUS OR LINK TO THE FORMATION OF SUCH A BELIEF . IDENTICAL VIEW HAS BEEN TAKEN BY THE DELHI HIGH COURT IN THE CASE OF AGYA RAM VS. CIT (2016) 72 TAXMAN.COM 287 (DELHI). 3. THE FACTS OF THE CASE IN HAND WHEN SEEN IN THE L IGHT OF THE LEGAL PROPOSITION AS LAID DOWN BY THE HON'BLE DELHI HIGH COURT AS DISCUSSED ABOVE, THE REOPENING IN THIS CASE CANNOT BE HELD TO BE VALID AND THE SAME IS ACCORDINGLY QUASHED. SINCE WE HAVE QUASHED THE VERY REOPENING OF THE ASSESSMENT IN RELATION TO THE APPE ALS FOR ALL THE THREE ASSESSMENT YEARS UNDER CONSIDERATION, THE CON SEQUENTIAL ADDITIONS MADE BY THE ASSESSING OFFICER HAVE NO LEG S TO STAND. HENCE, 5 WITHOUT GOING INTO THE MERITS OF THE ADDITIONS MADE BY THE ASSESSING OFFICER MADE CONSEQUENT TO THE REOPENING OF THE ASS ESSMENT IN RELATION TO THE ABOVE STATED THREE ASSESSMENT YEARS UNDER CONSIDERATION, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED ON THE GROUND OF INVALIDITY OF THE REOPENING OF THE ASSES SMENT. 4. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.07.2017. SD/- SD/- ( ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 5 TH JULY, 2017 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR
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