M/s Indira Exports Pvt. Ltd., Indore V. The ACIT, 5(1), Indore

ITA 96/IND/2012

• Counselvise Citation: 9622714 RSA 2012
• Duration Of Justice: 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 17-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: AJAY TULSIYAN MANISH VAIDYA; PANKAJ SHAH CAS
• Keywords: Reopening of assessment; Wrong claim; Validity of assessment; Reassessment proceedings
• Section: 43B; 143(3); 80HHC; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AAAC13883Q I.T.A.NO. 96 /IND/201 2 . A.Y. : 2003 - 04 INDIRA EXPORTS PVT.LTD., ACIT, 19/1, SILVER ESTATE, MINAL SHREE, Y.N. ROAD, INDORE. VS 5(1), INDORE. APPELLANT RESPONDENT APPELLANT BY : S/ SHRI AJAY TULSIYAN, MANISH VAIDYA AND PANKAJ SHAH, CAS RESPONDENT BY : SHRI R.A.VERMA, SR. DR DATE OF HEARING : 31 .0 7 .2012 DATE OF PRONOUNCEMENT : 23 . 0 8 .201 2 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 30 TH NOVEMBER, 2011, FOR THE ASSESSMENT YEAR -: 2: - 2 2003-04 IN THE MATTER OF ORDER PASSED U/S 147/143(3 ) OF THE INCOME-TAX ACT, 1961. 2. IN THE GROUNDS OF APPEAL, THE ASSESSEE IS AGGRIEVED FOR NOT ALLOWING CLAIM OF DEDUCTION IN RESPECT OF PROVI DENT FUND AND ESI PAYMENTS AND FOR DISALLOWANCE U/S 43B IN RE SPECT OF DELAYED PAYMENT OF INTEREST. ADDITIONAL GROUND WAS ALSO RAISED WITH REGARD TO VALIDITY OF ASSESSMENT FRAMED U/S 14 7, ON THE PLEA OF NON FURNISHING OF REASONS RECORDED FOR REOP ENING OF ASSESSMENT. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. IN THIS CASE, THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2003-04 FILED BY THE ASSESSEE WAS PROCESSED BY THE ASSESSING OFFICER U/S 143(1)(A). HOWEVER, IN THE C OMPUTATION OF INCOME FILED ALONGWITH THE RETURN, THE ASSESSEE AT ITS OWN ADDED THE AMOUNT OF P.F. AND ESI PAID BELATEDLY AND DISALLOWANCE U/S 43B. RETURN OF INCOME FILED AT NIL INCOME WAS PROCESSED BY THE ASSESSING OFFICER U/S 143(1) W ITHOUT DISTURBING THE SAME. MEANING THEREBY THE ASSESSING OFFICER ACCEPTED THE RETURNED INCOME AT NIL U/S 143(1). THE REAFTER, NOTICE WAS ISSUED U/S 148 ALLEGING WRONG CLAIM OF D EDUCTION -: 3: - 3 U/S 80HHC AS PER THE AMENDED PROVISIONS OF THE ACT APPLICABLE FOR THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION. IN THE ASSESSMENT FRAMED U/S 147 R.W .S. 143(3) AFTER GIVING DUE REASONING, THE ASSESSING OFFICER C OMPUTED THE ELIGIBLE DEDUCTION U/S HHC AS PER THE AMENDMENTS BR OUGHT IN BY THE TAXATION LAWS AMENDMENT, 2005, AND HELD THAT THE CLAIM OF DEDUCTION ALLOWABLE TO THE ASSESSEE U/S 80 HHC IS NIL. ACCORDINGLY, THE DEDUCTION OF RS. 41,17,205/- CLAIM ED U/S 80HHC WAS WITHDRAWN AND INCOME WAS ASSESSED AT RS. 41,17,205/-, IN PLACE NIL RETURN OF INCOME. ASSESSE ES CLAIM FOR DEDUCTION U/S 43B AND DELAYED PAYMENT OF P. F.AS MA DE DURING THE COURSE OF PROCEEDING U/S 147 WAS DECLINE D ON THE PLEA OF DECISION OF HON'BLE SUPREME COURT IN THE CA SE OF GOETZE (INDIA) LIMITED, 284 ITR 323. IN AN APPEAL F ILED BEFORE THE CIT(A), CALCULATION OF DEDUCTION U/S 80HHC BY T HE ASSESSING OFFICER WAS UPHELD. CLAIM OF DEDUCTION U/ S 43B AND PAYMENT OF P. F. & ESI CONTRIBUTION WAS DECLINED ON THE PLEA THAT THE ASSESSEE WAS NOT ENTITLED TO TAKE SUCH PLE A U/S 148 PROCEEDINGS IN SO FAR AS PROCEEDINGS U/S 147 OF THE ACT ARE FOR THE BENEFIT OF REVENUE AND NOT FOR ASSESSEE. RELIAN CE WAS -: 4: - 4 PLACED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF SUN ENGINEERING WORKS PRIVATE LIMITED. AGAINST THIS ORDER OF CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE US . 4. IT WAS CONTENDED BY THE LD. AUTHORIZED REPRESENTATI VE THAT CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY U/S 147 AND NOTICE U/S 148 WAS ISSUED ON 29.03.2010 AND IN RESPONSE TO WHICH ASSESSEE HAS FILED A LETTER ON 29.4.2010 R EQUESTING THE RETURN FILED U/S 139(1) TREATED AS RETURN FILED PURSUANT TO NOTICE U/S 148. HE FURTHER SUBMITTED THAT A REQUEST WAS MADE TO SUPPLY REASONS FOR REOPENING OF THE ASSESSMENT, HOWEVER, NO SUCH REASONS WAS SUPPLIED BY THE ASSESSING OFFIC ER. HE FURTHER SUBMITTED THAT THE ASSESSEE DURING THE COUR SE OF ASSESSMENT PROCEEDINGS HAS ALSO CLAIMED DEDUCTION I N RESPECT OF PROVIDENT FUND DEPOSITED BELATEDLY BUT BEFORE DU E DATE OF FILING OF RETURN. THE ASSESSEE HAS CLAIMED DEDUCTIO N OF UNPAID INTEREST WRONGLY DISALLOWED U/S 43B. BY RELYING ON THE DECISION OF BOMBAY HIGH COURT REPORTED IN 340 ITR 6 6 THE LD. AUTHORIZED REPRESENTATIVE VEHEMENTLY ARGUED THAT N ON SUPPLY OF REASONS FOR REOPENING OF ASSESSMENT HAS VITIATED THE ENTIRE REASSESSMENT PROCEEDINGS. -: 5: - 5 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOUND FROM RECORD THAT RETURN FILED FOR THE RELEVANT ASSE SSMENT YEAR WAS MERELY PROCESSED U/S 143(1)(A) AND INTIMATION W AS ISSUED BY ACCEPTING THE INCOME OFFERED IN THE RETURN OF IN COME. HOWEVER, NO ADDITION OR DISALLOWANCE WAS MADE BY TH E ASSESSING OFFICER U/S 143(1). THEREAFTER, THE ASSES SING OFFICER ISSUED NOTICE FOR REOPENING OF ASSESSMENT ON THE PL EA THAT CLAIM OF DEDUCTION U/S 80HHC WAS NOT CORRECT IN VIE W OF THE AMENDMENT BROUGHT IN BY THE TAXATION LAWS AMENDMENT ACT, 2005. IN THE ORDER FRAMED U/S 143(3)/147, THE ASSES SING OFFICER HAS RECOMPUTED THE CLAIM U/S 80HHC AT NIL, WHICH HAS NOT BEEN CHALLENGED BEFORE US. HOWEVER, DURING REAS SESSMENT PROCEEDINGS U/S 147, THE ASSESSEE HAS CLAIMED THE DISALLOWANCE U/S 43B IN RESPECT OF UNPAID INTEREST AND ALSO CLAIM OF DEDUCTION IN RESPECT OF PROVIDENT FUND DUE S, WHICH WAS PAID BEFORE THE LAST DATE OF FILING RETURN, EVE N THOUGH IN THE COMPUTATION OF INCOME FILED WITH THE RETURN THE ASSESSEE AT ITS OWN ADDED THESE AMOUNTS IN THE TOTAL INCOME. HON'BLE SUPREME COURT IN THE CASE OF SUN ENGINEERING WORKS (SUPRA) HAS HELD THAT ALTHOUGH SECTION 147 IS PART OF TAXIN G STATUTE, -: 6: - 6 WHICH IMPOSES NO CHARGE ON THE SUBJECT BUT DEALS ME RELY WITH THE MACHINERY OF ASSESSMENT AND IN INTERPRETING A P ROVISION OF THAT KIND, THE RULE IS THAT CONSTRUCTION SHOULD BE PREFERRED WHICH MAKES THE MACHINERY WORKABLE. IT WAS FURTHER OBSERVED THAT PROCEEDINGS U/S 147 OF THE ACT ARE FOR THE BEN EFIT OF THE REVENUE AND NOT FOR AN ASSESSEE, AND ARE AIMED AT G ARNERING ESCAPED INCOME OF ASSESSEE, THE SAME CANNOT BE AL LOWED TO BE A CONVERTED AS REVISIONAL OR REVIEW PROCEEDI NGS, AT THE INSTANCE OF THE ASSESSEE, THEREBY MAKING THE MACHIN ERY UNWORKABLE. IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT, THE POWERS OF ITO U/S 147 IS CONFINED ONLY T O SUCH INCOME WHICH HAS ESCAPED ASSESSMENT AND IT DOES NOT EXTEND TO RECONSIDER GENERALLY THE CONCLUDED EARLIER ASSES SMENT. THUS, THE CLAIMS WHICH HAVE BEEN CONSIDERED AND DI SALLOWED IN THE ORIGINAL ASSESSMENT PROCEEDINGS CANNOT BE AL LOWED TO BE RE-AGITATED ON THE ASSESSMENT BEING REOPENED FOR BR INGING TO TAX CERTAIN INCOME WHICH HAS ESCAPED ASSESSMENT. SI NCE THE CONTROVERSY ON REASSESSMENT IS CONFINED TO MATTERS WHICH ARE RELEVANT ONLY IN RESPECT OF THE INCOME WHICH HAS NO T BEEN BROUGHT TO TAX DURING THE COURSE OF ORIGINAL ASSESS MENT, THE -: 7: - 7 MATTER NOT AGITATED IN THE CONCLUDED ORIGINAL ASSES SMENT PROCEEDINGS ALSO CANNOT BE PERMITTED TO BE RE-AGITA TED IN THE REASSESSMENT PROCEEDINGS UNLESS RELATABLE TO THE IT EMS SOUGHT TO BE TAXED AS ESCAPED INCOME. DURING THE RE-ASSE SSMENT PROCEEDINGS, ASSESSEE CAN ONLY AGITATE THE INCOME W HICH IS ALLEGED BY REVENUE AS ESCAPED ASSESSMENT, TO SHOW T HAT THERE IS ACTUALLY NO ESCAPEMENT OF INCOME, HE IS NOT EMPO WERED TO PUT FOR THE CLAIM FOR ALLOWING ANY FURTHER DEDUCTIO N WHICH HAS BEEN DECLINED IN THE ORIGINAL ASSESSMENT. THE ASSES SEE IS REQUIRED TO FILE APPEAL BEFORE THE CIT(A) IN RESPEC T OF ITEM OF DISALLOWANCE MADE IN THE ORIGINAL ASSESSMENT OR IN THE INTIMATION ISSUED U/S 143(1). HOWEVER, IN THE INSTA NT CASE EVEN IF ASSESSEE WANTS TO AGITATE THE DISALLOWANCE OF ANY ITEM OF EXPENDITURE U/S 43B OR PAYMENT OF P. F. AND ESI BEFORE LAST DATE OF FILING RETURN, HE IS AT A LIBERTY TO FILE A PPEAL AGAINST INTIMATION ISSUED U/S 143(1), BUT HE IS NOT ENTITLE D TO RAISE GROUNDS FOR WRONG DISALLOWANCE UNDER THE PROCEEDING S INITIATED U/S 147. 6. THE GROUNDS RAISED BY THE ASSESSEE ON MERITS OF DISALLOWANCE, BEFORE US, EVEN THOUGH SIMILAR GROUND S DECIDED -: 8: - 8 BY THIS BENCH IN ASSESSEES OWN CASE, IN ITS FAVOUR IN THE ASSESSMENT YEAR 2007-08, HOWEVER, THAT WAS THE CASE WHERE SUCH DISALLOWANCE WAS MADE U/S 143(3) AND THE ASSES SEE HAS AGITATED SUCH DISALLOWANCE/ADDITIONS BEFORE THE CIT (A) AND SUBSEQUENTLY BEFORE THE TRIBUNAL. IN VIEW OF THESE FACTS, THE ASSESSEE WAS AT LIBERTY TO FILE APPEAL AGAINST ORDE R PASSED U/S 143(1) FOR THE ASSESSMENT YEAR 2003-04 UNDER CONSID ERATION BEFORE THE PROPER FORUM. WE DIRECT ACCORDINGLY. HO WEVER, THESE GROUNDS CANNOT BE AGITATED IN THE PROCEEDINGS INITIATED U/S 147. 7. IT IS CLEAR FROM THE DOCUMENTS PLACED ON RECORD AS WELL AS ORDER PASSED BY THE ASSESSING OFFICER AND CIT(A) THAT THE REASONS OF REOPENING WAS CLEAR. THE ASSESSING OFFIC ER HAS CLEARLY STATED IN THE NOTICE/ORDER PASSED U/S 143(3 )/147 THAT THERE WAS WRONG CLAIM OF DEDUCTION U/S 80HHC IN VIE W OF THE AMENDED PROVISIONS OF LAW. THE REOPENING WAS CHALLE NGED BY THE ASSESSEE ITSELF IN ITS REPLY TO THE SAME AND PU T FORTH ITS CLAIM OF DEDUCTION U/S 80HHC. VALIDITY OF REOPENING WAS NOT PRESSED BY ASSESSEE BEFORE THE CIT(A). THUS, WE DO NOT FIND ANY SUBSTANCE IN THE ARGUMENTS OF THE LD. AUTHORIZE D -: 9: - 9 REPRESENTATIVE THAT REASONS FOR REOPENING WAS NOT FURNISHED, THEREFORE, ASSESSMENTS SHOULD BE HELD AS NULL AND V OID. 8. BEFORE PARTING WITH THE MATTER, IT IS PERTINENT TO MENTION THAT ALLOWING THE ASSESSEE TO INCORPORATE T HESE DEDUCTIONS WILL RENDER THE RETURN OF INCOME AS LOS S RETURN, WHICH IS REQUIRED TO BE FILED WITHIN THE TIME LIMIT PRESCRIBED U/S 139(1). UNDER PROVISIONS OF SECTION 80, THE ASS ESSEE IS NOT ENTITLED TO CARRY FORWARD AND SET-OFF THE LOSS UNLE SS SAME IS DETERMINED U/S 139(3) READ WITH SECTION 139(1). 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED IN TERMS INDICATED HEREINABOVE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 23 RD AUGUST, 2012. SD/ - SD/ - (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23 RD AUGUST, 2012. CPU* 238