ITO, Corporate Ward -4(1), Chennai V. Muktha Infrastructure (P) Ltd, Chennai

MA 66/CHNY/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4577 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 12-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D ANAND
• Keywords: Reopening of assessment; Tangible material; Difference of opinion; Reason to believe; Change of opinion; Set aside
• Section: 143(3); 115JB; 143(1); 147; 148

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY, JUDICIAL MEMBER M.P. NO. 66/CHNY/2019 [IN I.T.A. NO. 316/CHNY/2018] ASSESSMENT YEAR : 2010-11 THE INCOME TAX OFFICER, CORPORATE WARD 4(1), CHENNAI. VS. M/S. MUKTHA INFRASTRUCTURE (P) LTD., 4/318, MARG AXIS, RAJIV GANDHI SALAI, KOTTIVAKKAM, CHENNAI 600 041. [PAN: AAFCM0703Q] ( /APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI M.S. NETRA PAL, JCIT / RESPONDENT BY : SHRI D. ANAND, ADVOCATE / DATE OF HEARING : 17.05.2019 /DATE OF PRONOUNCEMENT : 22.05.2019 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: BY MEANS OF PRESENT MISCELLANEOUS PETITION, THE REVENUE SEEKS TO RECALL THE ORDER PASSED BY THE TRIBUNAL IN I.T.A. NO.361/CHNY/2018 DATED 15.10.2018 FOR THE ASSESSMENT YEAR 2010-11. BY REFERRING TO THE PETITION, THE LD. DR SUBMITTED THAT THE TRIBUNAL HAS ERRONEOUSLY HELD THAT THE REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE INCOME TAX ACT [ACT IN SHORT] IS BARRED BY LIMITATION SINCE THE ASSESSMENT WAS REOPENED BEYOND FOUR YEARS. IT WAS FURTHER SUBMISSION THAT THE TRIBUNAL HAS HELD THAT THE DEPARTMENT HAD NOT BROUGHT OUT ANY TANGIBLE MATERIAL ON RECORD, BUT SUGGESTING THAT THE M.P. NO. 66/CHNY/19 2 INCOME HAS ESCAPED FROM THE ASSESSMENT AND THUS, QUASHED THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT IS A MISTAKE APPARENT ON RECORD AND PLEADED FOR RECALLING THE ORDER PASSED BY THE TRIBUNAL DATED 15.10.2018 AND ADJUDICATION OF THE APPEAL ON MERITS. 2. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT PURELY BASED ON THE CHANGE OF OPINION WITHOUT ANY TANGIBLE MATERIAL BROUGHT ON RECORD AND MOREOVER, SINCE THE REOPENING OF ASSESSMENT WAS BARRED BY LIMITATION, THE TRIBUNAL QUASHED ASSESSMENT ORDER UNDER SECTION 143(3) R.W.S. 147 OF THE ACT. THUS, THERE IS NO MISTAKE APPARENT ON RECORD WARRANTING RECALLING OF THE TRIBUNAL AND PRAYED THAT THE MP FILED BY THE REVENUE IS LIABLE TO BE DISMISSED. 3. WE HAVE HEARD BOTH THE SIDES, PERUSED THE ORDER OF THE TRIBUNAL. WHAT WAS OBSERVED AND HELD BY THE TRIBUNAL IS REPRODUCED AS UNDER: 6. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN THIS CASE, THE RETURN FILED BY THE ASSESSE WAS PROCESSED UNDER SECTION 143(1) OF THE ACT ON 14.04.2011 AND THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUE ON 26.08.2011. AFTER VERIFICATION OF THE DETAILS FURNISHED BY THE ASSESSEE IN RESPONSE TO THE STATUTORY NOTICES, THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMPLETED ON 22.03.2013. ADMITTEDLY, THERE WAS NO SEARCH & SEIZURE OPERATION OR SURVEY CONDUCTED IN THIS CASE. HOWEVER, THE CASE OF THE ASSESSEE WAS REOPENED UNDER SECTION 147 OF THE ACT BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT ON 10.12.2014 AND DULY SERVED ON THE ASSESSEE ON 20.12.2015. FROM THE ABOVE DETAILS, IT IS EVIDENT THAT THE ASSESSMENT COMPLETED UNDER SECTION 143(3) OF THE ACT WAS REOPENED UNDER SECTION 147 OF THE ACT BEYOND FOUR YEARS. M.P. NO. 66/CHNY/19 3 6.1 AS PER THE PROVISO TO SECTION 147 OF THE ACT, WHERE AN ASSESSMENT UNDER SECTION 143(3) OF THE ACT IS COMPLETED, THE REASSESSMENT UNDER SECTION 147 OF THE ACT CANNOT BE MADE AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR COMPLETION OF ASSESSMENT. IN OUR CONSIDERED VIEW, THE ASSESSEE HAS FILED ALL NECESSARY DETAILS DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER DISCLOSING FULLY AND TRULY ALL MATERIAL FACTS FOR COMPLETION OF ASSESSMENT AND THE ASSESSING OFFICER HAS NOT DISTURBED THE COMPUTATION UNDER SECTION 115JB OF THE ACT. THEREFORE, IN VIEW OF THE PROVISO TO SECTION 147 OF THE ACT, SINCE THERE IS NO FAILURE ON THE PART OF THE ASSESSEE IN DISCLOSING MATERIAL FACTS NECESSARY FOR COMPLETION OF ASSESSMENT, THE REASSESSMENT MADE UNDER SECTION 147 OF THE ACT BEYOND FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR IS BAD IN LAW. THE HONBLE SUPREME COURT IN THE CASE OF CIT V FORAMER FRANCE [ 264 ITR 566] AFFIRMED THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT V. FORAMER FRANCE [247 ITR 436], WHEREIN THE HONBLE HIGH COURT HELD THAT WHEN THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS FOR ASSESSMENT, THE ASSESSMENT CANNOT BE REOPENED UNDER SECTION 147 OF THE ACT AND IS BARRED BY LIMITATION. IT WAS ALSO HELD THAT THE ASSESSMENT CANNOT BE REOPENED ON MERE CHANGE OF OPINION. IN THE CASE OF CIT V. M/S. KELVINATOR OF INDIA LTD. [320 ITR 561], THE HONBLE SUPREME COURT HELD THAT AFTER 01.04.1989, THE ASSESSING OFFICER HAS POWER TO REOPEN THE ASSESSMENT UNDER SECTION 147 PROVIDED HE HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT AND THERE IS TANGIBLE MATERIAL TO COME TO THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME AND MERE CHANGE OF OPINION CANNOT PER SE THE REASON TO REOPEN THE ASSESSMENT. IN THE PRESENT CASE, THE DEPARTMENT HAS NOT BROUGHT OUT ANY TANGIBLE MATERIAL ON RECORD, SUGGESTING THAT THE INCOME HAS ESCAPED FROM ASSESSMENT. IN VIEW OF THE ABOVE, WE HOLD THAT THE REOPENING OF THE ASSESSMENT MADE BY THE ASSESSING OFFICER IS BAD IN LAW. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND QUASH THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT. THUS, THE GROUND RAISED BY THE ASSESSEE STANDS ALLOWED. SINCE WE HAVE QUASHED THE ASSESSMENT ORDER UNDER SECTION 143(3) R.W.S. 147 OF THE ACT, THE ADDITION MADE UNDER SECTION 115JB OF THE ACT REQUIRES NO ADJUDICATION. M.P. NO. 66/CHNY/19 4 4. FROM THE ABOVE, IT IS CLEAR THAT THE TRIBUNAL HAS OBSERVED THAT THE REOPENING OF ASSESSMENT IS NOT ONLY BARRED BY LIMITATION, BUT ALSO NO TANGIBLE MATERIAL WAS BROUGHT ON RECORD LEADING TO REOPENING OF ASSESSMENT. IN THE APPELLATE ORDER, THE LD. CIT(A) HAS OBSERVED THAT THE ASSESSING OFFICER WAS LED TO BELIEVE THAT THE INCOME WAR TRULY EXEMPT FROM TAXATION UNDER THE ACT IN ASSESSMENT UNDER SECTION 143(3) OF THE ACT. HOWEVER, THE LD. CIT(A) HAS MENTIONED THAT SUBSEQUENTLY THE ASSESSING OFFICER HAS REALISED THE TAX EVASION AND HAS INITIATED THE PROCEEDINGS UNDER SECTION 148 OF THE ACT. BUT, ON WHICH MATERIAL THE ASSESSING OFFICER HAS REALIZED THE TAX EVASION BY THE ASSESSEE WAS NOT BROUGHT ON RECORD. THE COMPLETE DETAILS FURNISHED BY THE ASSESSEE FOR COMPLETION OF ASSESSMENT WERE NOT IN DISPUTE. ADMITTEDLY, THERE WAS NO SURVEY OR SEARCH PROCEEDINGS INITIATED BY THE DEPARTMENT IN THE CASE OF THE ASSESSEE OR THERE IS ANY EVIDENCE THAT THE DEPARTMENT HAS INVENTED SOME MATERIAL EVIDENCE THAT LED THE ASSESSING OFFICER TO REALIZE THE TAX EVASION, THEREBY THE ASSESSING OFFICER REOPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. THE ARGUMENT OF THE LD. DR WAS THAT THE DATE OF SERVICE OF NOTICE WAS INADVERTENTLY MENTIONED AS 20.12.2015 INSTEAD OF 20.12.2014 APPEARS TO BE VAGUE. BUT THE DEPARTMENT IS SILENT ABOUT THE TANGIBLE MATERIAL AVAILABLE BEFORE THE ASSESSING OFFICER FOR REOPENING OF ASSESSMENT. SINCE THE DEPARTMENT FAILS ON BOTH COUNTS, THE TRIBUNAL SET ASIDE THE ORDER OF THE LD. CIT(A) AND QUASHED THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT AND THUS, WE FIND NO MERITS IN THE M.P. NO. 66/CHNY/19 5 PETITION FILED BY THE REVENUE. ACCORDINGLY, THE MP FILED BY THE REVENUE STANDS DISMISSED. 5. IN THE RESULT, THE M.P. FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THE 22 ND MAY, 2019 AT CHENNAI. SD/- SD/- (A.MOHAN ALANKAMONY) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, 22.05.2019 VM/- /COPY TO: 1. / APPELLANT, 2. / RESPONDENT, 3. ( ) /CIT(A), 4. /CIT, 5. /DR & 6. /GF.