ACIT, UDAIPUR V. M/s. Manoj Sisodia and Party, UDAIPUR

ITA 84/JODH/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9634 (ITAT-JODHPUR)
• Duration Of Justice: 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 10-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K MEENA
• Keywords: Reopening of assessment; Principle of natural justice; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER ITA NO.82/JODH/2017 ASSESSMENT YEAR:2010-11 THE ACIT VS. M/S. KRISHAN LAL MEEL AND PARTY CIRCLE-2 ALWAR GROUP. HO-UDAIPUR UDAIPUR 319, BHOPALPURA, UDAIPUR PAN NO. AAAAK7971K ITA NO.83/JODH/2017 ASSESSMENT YEAR:2013-14 THE ACIT VS. M/S. VASUDEV AND PARTY CIRCLE-2 JALORE GROUP, HO-UDAIPUR UDAIPUR 424, PANCHRATAN COMPLEX UDAIPUR PAN NO. AAAAV9292L & ITA NO.84/JODH/2017 ASSESSMENT YEAR:2010-11 THE ACIT VS. M/S. MANOJ SISODIA AND PARTY CIRCLE-2 JODHPUR GROUP, HO-UDAIPUR UDAIPUR 424, PANCHRATAN COMPLEX BHOPALPURA, UDAIPUR PAN NO. AABAM2157L (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SH. S.K. MEENA DATE OF HEARING : 01/03/2017 DATE OF PRONOUNCEMENT : 03/03/2017 ORDER THESE THREE APPEALS HAVE BEEN FILED BY THE REVENUE ASSAILING THE CORRECTNESS OF THE SEPARATE ORDERS DATED 25.11.2016 OF CIT(A)-I , UDAIPUR PERTAINING TO DIFFERENT ASSESSEES IN DIFFERENT ASSESSMENT YEARS ON IDENTICAL GROUNDS. ACCORDINGLY FOR THE SAKE OF CONVENIENCE THESE APPEA LS ARE BEING DECIDED BY A COMMON ORDER AS FACTS AND CIRCUMSTANCES AND ARGUMEN TS QUA THE ISSUE REMAINS THE SAME. FOR READY REFERENCE THE GROUNDS FROM ITA NO.8 2/JODHPUR/2017 IS EXTRACTED HEREUNDER: ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF T HE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN:- WHETHER ON FACTS AND THE CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN QUASHING THE REOPENING OF PROCEEDINGS DESPITE THE FACTS THAT THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT THE A OP HAS INCORRECTLY CLAIMED THE CREDIT OF TCS/TDS CERTIFICATES ISSUED IN THE NAME OF INDI VIDUAL MEMBERS OF THE AOP. 2. THOUGH THE LEARNED SR.D.R. HEREIN ALSO PLACED RE LIANCE UPON THE ASSESSMENT ORDER HOWEVER HE WAS UNABLE TO SHOW THAT THE ORDERS OF THE ITAT TAKEN INTO CONSIDERATION AS ON IDENTICAL ISSUE TAKEN NOTE OF I N THE IMPUGNED ORDER AT PAGE 10 HAVE BEEN UPSET BY ANY HIGHER FORUM. IDENTICAL ISSU E WAS LISTED FOR HEARING BEFORE THIS BENCH ON AN EARLIER DATE ALSO AND IN THE ABSEN CE OF ANY CONTRARY DECISION OF A HIGHER FORUM THE APPEALS OF THE REVENUE AFTER GIVIN G TIME HAVE BEEN DISMISSED. ON PERUSAL OF THE ORDER IT WOULD SHOW THAT COGNIZANCE HAS BEEN TAKEN OF BY THE CIT(A) IN QUASHING OF THE 148 PROCEEDINGS BY THE CIT(A) ON THE FOLLOWING REASONING. 11. THAT, AFTER REOPENING PROCEEDINGS, THE ASSESSE D INCOME OF THE APPELLANT AOP AS IT IS AS THE INCOME ASSESSED U/S.143(3) OF THE IT ACT, 1961 IN THE ORIGINAL ASSESSMENT PROCEEDINGS. THEREFORE, THE ASSESSMENT ORDER PASSED U/S. 147 OF THE IT ACT, 1961 IS ERRONEOUS AND BAD IN LAW IN VIEW OF THAT THERE IS N O CHANGE IN THE ASSESSED AND REASSESSED INCOME OF THE RELEVANT ASSESSMENT YEAR. IN THIS CONNECTION, WE RELIED UPON THE BELOW MENTIONED JURISDICTIONAL ITAT, JODHPUR BE NCH DECISIONS IN THE SIMILAR AOP CASES ON THE IDENTICAL ISSUES, WHEREIN THE HON'BLE ITAT, JODHPUR BENCH QUASHED THE REASSESSMENT PROCEEDINGS. THE DETAILS OF CASES, WHE REIN THE FINDINGS AND DECISIONS GIVEN BY THE HON'BLE ITAT, JODHPUR BENCH, JODHPUR A RE AS UNDER: SR. NO. NAME OF AOP PAN A.Y. APPEAL NO. DATE OF OR DER 1. M/S. KRISHAN LAL MEEL & PARTY ALWAR GROUP, HO- UDAIPUR, 319 BHUPALPUR, UDAIPUR AAAAK7971K 2009-10 ITA NO.370/JODH/2015 & ITA NO.401/JODH/2015 04.09.2015 2. M/S. HANUMAN SINGH HITENDRA TAK RITESH SUWALAK & PARTY UDAIPUR GROUP, HO-UDAIPUR 20, SAHELI NAGAR, UDAIPUR AAAAH 2811F 2009-10 ITA NO.379/JODH/2015 & ITA NO.400/JODH/2015 04.09.2015 3. M/S. PRABHU LAL KAILASH CHAND & PARTY RAJSAMAND GROUP, HO-UDAIPUR 302, VARDHMAN COMPLEX, BHUPALPURA, UDAIPUR. AAAAP7637F 2009-10 ITA NO.380/JODH/2015 & ITA NO.399/JODH/2015 04.09.2015 4. M/S. OM PRAKASH MAHESH KUMAR & PARTY SIROHI-JALORE GROYUP, HO- UDAIPUR, 401, UJJAWAL APARTMENT, PLOT NO.-4, BHATT JI KI BARI, UDAIPUR. AAAAO1179P 2009-10 ITA NO.388/JODH/2015 & ITA NO.398/JODH/2015 04.09.2015 5. M/S. LEKHRAJ MEWARA & PARTY JODHPUR GROUP, HO-UDAIPUR 103, UJJAWAL APARTMENT, PLOT NO.-4 BHATT JI KI BARI, UDAIPU R. AAAAL2221M 2009-10 ITA NO.363/JODH/2015 & ITA NO.394/JODH/2015 17.03.2016 6. M/S. ASHOK KUMAR DEVENDRA MEEL & PARTY JAIPUR GROUP, HO-UDAIPUR 318, BHUPALPURA, UDAIPUR AAAAA9393H 2009-10 ITA NO.372/JODH/2015 & ITA NO.397/JODH/2015 17.03.2016 7. M/S. OM PRAKASH MAHESH KUMAR & PARTY, PALI GROUP, HO-UDAIPUR, 101, VARDHMAN COMPLEX, BHUPALPUR, UDAIPUR AAAAO1116E 2009-10 ITA NO.390/JODH/2015 & ITA NO.395/JODH/2015 17.03.2016 8. M/S. DILIP KUMAR & PARTY AJMER GROUP, HO-UDAIPUR 401, UJJAWAL APARTMENT PLOT NO.4 BHATT JI KI BARI, UDAIPUR. AAAAD4764H 2009-10 ITA NO.369/JODH/2015 & ITA NO.396/JODH/2015 17.03.2016 UNDER THE FACT AND CIRCUMSTANCES OF THE APPELLANT C ASE AND IN VIEW OF THE LEGAL POSITION IN VARIOUS JUDICIAL PRONOUNCEMENTS, WHERE ALL MATER IAL FACTS WERE AVAILABLE BEFORE THE ASSESSING OFFICER DURING ORIGINAL ASSESSMENT AND TH E ASSESSING OFFICER HAD EXAMINED THE SAME, REASSESSMENT PROCEEDINGS CANNOT BE TAKEN UP BY CHANGING THE OPINION BASED ON AUDIT NOTE. FURTHER, FROM THE PLAIN READING OF REASON RECORDED FOR REOPENING OF ASSESSEES CASE, ITS APPEAR THAT THE DEPARTMENT TRE ATED THE TCS/TDS CREDIT AMOUNT AS INCOME ESCAPEMENT FROM ASSESSMENT IN TERMS OF SECTI ON 147 OF THE IT ACT, 1961. HOWEVER, SECTION 147 PERTAINS TO THE ESCAPEMENT OF INCOME ONLY NOT THE CREDIT OF TDS/TCS. THEREFORE, THE ACTION TAKEN U/S.147 OF THE IT ACT, 1961 FOR REOPENING OF ASSESSMENT PROCEEDINGS INTEREST EH ASSESSEES CASE HAS NO WARRANT IN LAW IN THE ABSENCE OF ANY MATERIAL EVIDENCE TO COVER ANY TRANS ACTION IN THE FOUR CORNERS OF THE INCOME ESCAPING ASSESSMENT AND THE REASON RECORDED FOR REOPENING THE APPELLANT CASE ITSELF DOES NOT REPRESENT THE OBJECTIVE OR BONA FID E ONE AND THE SAID REASON TO BELIEVE CANNOT BE REASON TO SUSPECT. IT IS A SETTLED LAW TH AT REASONS TO BELIEVE CAN NEVER BE THE OUTCOME OF A CHANGE OF OPINION. IT IS ESSENTIAL THA T BEFORE ANY ACTION IS TAKEN BY THE OFFICER, THE OFFICER SHOULD SUBSTANTIATE HIS SATISF ACTION. WHEN ENTIRE FACTS RELATING TO THE INCOME WERE MADE KNOWN TO THE OFFICER AND NO OBJECT IVE REASON HAS BEEN GIVEN FOR ISSUING A NOTICE, THE ASSESSMENT SO COMPLETED IS AG AINST THE PRINCIPAL OF NATURAL JUSTICE AND BAD IN LAW AND LIABLE TO BE QUASHED. 2.1 CONSIDERING THE SAME, THE CIT(A) CAME TO THE CO NCLUSION AS UNDER: 3.3. THE SUBMISSIONS OF THE ASSESSEE AND THE RELEVA NT FINDINGS OF THE AO HAVE BEEN CONSIDERED. ON PERUSAL OF THE ORDER OF THE ITAT, JODHPUR DT. 04 .09.2015 IN CASES OF SIMILAR AOPS (TABLE ON PAGE 10 REFERS) RELIED UPON BY THE ASSESSEE, IT IS SEEN THAT THE PRECISE QUESTION WHETHER ASSESSMENT COULD BE REOPENED ON GROUNDS OF EXCESS A LLOWANCE OF TCS CREDIT WAS CONSIDERED BY THE HON. TRIBUNAL AND IT WAS HELD AS UNDER- NOW COMING TO THE APPEALS OF THE ASSESSEE WHEREIN REASSESSMENT HAS BEEN CHALLENGED ON THE GROUND THAT THERE WAS NO ESCAPEMENT OF INCOME. FROM A PLAIN READING OF THE SECTION 147 OF THE IT ACT, 1961, IT IS CLEAR THAT PROVISIONS OF SECTIO N 147 ARE APPLICABLE WHEREIN ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT NOT THE EX CESS CREDIT OF TAX OR TCS I TDS. THE ASSESSEES CASE WAS REOPENED FOR THE REASON THAT TH E INCOME OF THE APPELLANT TO THE EXTENT OF RS. 26,68,331/- ON ACCOUNT OF EXCESS CREDIT OF TCS/TDS ALLOWED TO THE ASSESSEE AOP HAS ESCAPED THE ASSESSMENT IN TERMS OF SECTION 147 OF THE IT ACT, 1 961, WHICH WAS NOT COME WITHIN THE PURVIEW OF SECTION 147 OF THE IT ACT, 1961, AS THE EXCESS CRED IT OF TCS/TDS IS NOT THE PART OF INCOME OF THE ASSESSEE. HENCE, THE ESSENTIAL PRECONDITION OF SECT ION 147 OF THE IT ACT, 1961 HAS NOT BEEN FULFILLED ON THE ASSESSEES CASE. IT IS CLEAR FROM THE FACTS ON RECORD THAT THERE IS NO VARIATION IN THE INCOME EVEN AFTER PASSING OF ORDER U/S 143/147 OF THE ACT. SINCE THERE IS NO ESC APEMENT OF INCOME WHICH HAS BEEN BROUGHT WITHIN THE TAX NET AFTER REOPENING, THERE IS NO JUS TIFICATION FOR REOPENING OF ASSESSMENT. IN THE INSTANT CASE ALSO THE ONLY GROUND FOR REOPEN ING OF ASSESSMENT IS ALLOWANCE OF EXCESS CREDIT OF TCS AND ASSESSMENT U/S 147 HAS BEEN COMPLETED AT THE SAME FIGURE AT WHICH EARLIER ASSESSMENT U/S 143(3) WAS COMPLETED. IN THESE FACTS THE ABOVEMENTIONED DECISION OF THE HON. TRIBUNAL IS SQUARELY APPLICABLE. RESPECTFULLY FOLLO WING THE ABOVE MENTIONED DECISION OF THE HON. TRIBUNAL IT IS HELD THAT IN THE INSTANT CASE THE RE ASSESSMENT PROCEEDINGS WERE NOT VALIDLY INITIATED AND THEREFORE THE IMPUGNED ORDER U/S 148 IS HEREBY QUASHED. THE GROUND OF APPEAL IS THUS ALLOWED. SINCE IT HAS BEEN HELD ABOVE THAT THE REASSESSMENT PROCEEDINGS WERE NOT VALIDLY INITIATED AND THEREFORE THE IMPUGNED ORDER U/S 147 ITSELF HAS BEE N QUASHED IT IS NOT FOUND NECESSARY TO ADJUDICATE THE OTHER GROUNDS RAISED IN APPEAL. 3. BY WAY OF ABUNDANT CAUTION LIBERTY IS GIVEN TO T HE REVENUE THAT IN THE EVENTUALITY IT IS BROUGHT TO THE NOTICE OF ITAT THA T THE AFORESAID VIEW TAKEN BY THE ITAT HAS BEEN UPSET BY A HIGHER FORUM, THE REVENUE WOULD BE AT LIBERTY TO PRAY FOR A RECALL OF THIS ORDER. IN VIEW OF THE FACT THA T THE ASSESSEE-RESPONDENT IN EACH OF THESE CASES DESPITE NOTICE HAS REMAINED UNREPRESENT ED IT IS MADE CLEAR THAT NO VESTED RIGHT SHALL OPERATE IN FAVOUR OF THE ASSESSE E QUA THE REQUEST FOR RECALL OF THE REVENUE IF SO MADE IN ACCORDANCE WITH LAW ON THE AB OVE MENTIONED GROUND BY THE REVENUE. 4. SINCE THE FACTS AND CIRCUMSTANCES THE ARGUMENTS IN ITA NOS.83 AND 84/JODH/2017 REMAIN THE SAME AND QUA THE IDENTICAL REASONING OF THE CIT(A) ACCORDINGLY ON ACCOUNT OF IDENTICAL REASONING WITH IDENTICAL OBSERVATIONS THE DEPARTMENTAL APPEALS ARE DISMISSED AS PER THE PRONO UNCEMENT MADE IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 5. IN THE RESULT, THE APPEALS OF THE REVENUE ARE DI SMISSED. THE ORDER IS PRONOUNCED ON 03/03/2017 IN THE OPEN C OURT. SD/- (DIVA SINGH) JUDICIAL MEMBER DATED: 03 MARCH, 2017 PRABHATKUMAR KESARWANI COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT