M/S Kamal Mahila Nagari Sahakari Patpedhi Maryadit, Panvel V. Income Tax Officer, Ward-5, Panvel, Panvel

ITA 876/PUN/2022

AI Insights

The case involves M/s. Kamal Mahila Nagari Sahakari Patpedhi Maryadit, which appealed against the reassessment proceedings initiated by the Income Tax Officer (ITO), Ward-5, Panvel for the assessment year 2010-11. The original assessment was completed under section 143(3) of the Income Tax Act, 1961, and later reopened under section 148. The Tribunal examined whether the conditions for reopening the assessment after four years were satisfied, particularly focusing on whether there was a failure on the part of the assessee to disclose all material facts necessary for the assessment. The Tribunal found that the assessee had disclosed all relevant facts in the original return, and thus, the reassessment was not justified.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137759 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 05-02-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 05-12-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reassessment proceedings; TDS
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, ‘A’ PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.876/PUN/2022 नधा रण वष / Assessment Year : 2010-11 M/s. Kamal Mahila Nagari Sahakari Patpedhi Maryadit, Ground Floor, Shree Krishna Niwas, Tilak Road, Panvel 410 206 Maharashtra PAN : AAATK8008L Vs. ITO, Ward-5, Panvel Appellant Respondent आदेश / ORDER PER R.S. SYAL, VP : This appeal by the assessee is directed against the order dated 07-10-2022 passed by the CIT(A) in National Faceless Appeal Centre, Delhi in relation to the assessment year 2010-11. 2. The first grievance of the assessee is against the initiation of the reassessment proceedings. 3. Succinctly, the facts of the case are that the assessee furnished return declaring gross total income at Rs.43,21,786/- and Nil after claiming deduction u/s.80P(2) of the Act. The case Assessee by Shri Ajinkya M. Vaishampayan Revenue by Shri Ramnath P. Murkunde Date of hearing 06-02-2023 Date of pronouncement 07-02-2023 ITA No.876/PUN/2022 M/s. Kamal Mahila Nagari Sahakari Patpedhi Maryadit 2 was selected for scrutiny and assessment was completed u/s.143(3) on 26-02-2013 determining the total income at Rs.68.22 lakh and odd. Thereafter, the Assessing Officer (AO) issued notice u/s.148 on 29-03-2017 on the ground that the assessee wrongly claimed deduction of Rs.30,000/- towards TDS and Rs.11.00 lakh as provision for N.P.A., which were required to be disallowed. The assessment was eventually completed u/s 147 making addition of Rs.11,30,000/-. The assessee assailed the assessment order on the initiation of reassessment proceedings as well as merits before the ld. CIT(A). The first appeal came to be dismissed, against which the assessee has approached the Tribunal. 4. We have heard both the sides and gone through the relevant material on record. We espouse the initiation of reassessment first. The assessment was completed u/s.143(3) on 26-02-2013. Thereafter, the AO issued notice u/s.148 on 29-03-2017. Thus, it is apparent that the original assessment in this case was completed u/s.143(3) and the notice u/s.148 was issued after a period of four years from the end of the relevant assessment year, namely, 2010-11. Proviso to section 147, at the material time, provides that when an assessment has been ITA No.876/PUN/2022 M/s. Kamal Mahila Nagari Sahakari Patpedhi Maryadit 3 completed u/s.143(3) and the Assessing Officer seeks to reopen the assessment after a period of four years from the end of the relevant assessment year, it is incumbent upon the AO to first show that the income chargeable to tax had escaped assessment by reason of failure on the part of the assessee, inter alia, to disclose fully and truly all material facts necessary for assessment. As the period of four years in this case expired much before the issuance of notice u/.148, we need to examine if the requisite condition of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment, was complied with? 5. It can be seen from the reasons for reassessment that the assessee claimed deduction of Rs.30,000/- as TDS; and Rs.11.00 lakh as provision for N.P.A. Both these items were disclosed in the Profit and loss account. Nothing anent to these items was undisclosed, much less fully and truly, in the return. It was for the AO to take care of such necessary facts while completing the assessment u/s.143(3) of the Act and reach proper conclusions. Arguendo, the items of expenses, taken note of by the AO in the notice u/s.148, may lead to prima facie escapement of income, but such items cannot come within the ambit of section 147 after a ITA No.876/PUN/2022 M/s. Kamal Mahila Nagari Sahakari Patpedhi Maryadit 4 period of four years from the end of the relevant assessment year. The assessee claimed the above two deductions ex facie the Profit and loss account, which got allowed by the AO in the assessment u/s.143(3). The inference of the AO that these two items did not qualify for deduction, does not fall within the realm of failure of the assessee to disclose fully and truly all material facts necessary for reassessment. In that view of the matter, we hold that the reassessment was wrongly initiated. The same is, therefore, quashed. 6. In view of our decision on the legal issue, the other grounds raised by the assessee on merits have become infructuous and do not require any adjudication. 7. In the result, the appeal is allowed in above terms. Order pronounced in the Open Court on 07 th February, 2023. Sd/- Sd/- ( S.S. VISWANETHRA RAVI) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; िदनांक Dated : 07 th February, 2023 सतीश ITA No.876/PUN/2022 M/s. Kamal Mahila Nagari Sahakari Patpedhi Maryadit 5 आदेश की ितिलिप अ ेिषत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. थ / The Respondent 3. DR, ITAT, ‘A’ Bench, Pune 4. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune Date 1. Draft dictated on 06-02-2023 Sr.PS 2. Draft placed before author 06-02-2023 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *