Dilip B. Desai , Kolkata v. ACIT, Central Circle - 4(2), Kolkata

ITA 1975/KOL/2018 | 2010-2011
Pronouncement Date: 28-02-2020 | Result: Allowed

Appeal Details

RSA Number 197523514 RSA 2018
Assessee PAN ADPPD7773F
Bench Kolkata
Appeal Number ITA 1975/KOL/2018
Duration Of Justice 1 year(s) 5 month(s) 14 day(s)
Appellant Dilip B. Desai , Kolkata
Respondent ACIT, Central Circle - 4(2), Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 28-02-2020
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 28-02-2020
Date Of Final Hearing 09-01-2020
Next Hearing Date 09-01-2020
Last Hearing Date 05-12-2019
First Hearing Date 05-12-2019
Assessment Year 2010-2011
Appeal Filed On 14-09-2018
Judgment Text
ITA NO. 1975/KOL/2018 ASSESSMENT YEAR: 2010-2011 DILIP B. DESAI 1 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA A BENCH KOLKATA BEFORE SHRI P.M. JAGTAP VICE-PRESIDENT AND SHRI SATBEER SINGH GODARA JUDICIAL MEMBER I.T.A. NO. 1975/KOL/2018 ASSESSMENT YEAR: 2010-2011 DILIP B. DESAI .................................... .............................................APPELL ANT CONSTANTIA B WING 7 TH FLOOR MINTO PARK 11 DR. U.N. BRAHMACHARI STREET KOLKATA-700017 [PAN: ADPPD7773F] -VS.- ASSISTANT COMMISSIONER OF INCOME TAX .............. .......................RESPONDENT CENTRAL CIRCLE-4(2) KOLKATA AAYAKAR BHAWAN POORVA 110 SHANTIPLLY 5 TH FLOOR KOLKATA-700107 APPEARANCES BY: MRS. RUCHIRA LAKHOTIA ACA & MRS. PRITI KUMARI RAI ACA FOR THE APPELLANT SHRI DHRUBAJYOTI ROY JCIT FOR THE RESPONDEN T DATE OF CONCLUDING THE HEARING : JANUARY 09 2020 DATE OF PRONOUNCING THE ORDER : FEBRUARY 28 2020 O R D E R PER SHRI P.M. JAGTAP VICE-PRESIDENT :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-21 KOLKATA DA TED 13.07.2018. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L. IN THE ASSESSMENT ORIGINALLY COMPLETED FOR THE YEAR UNDER CONSIDERATI ON UNDER SECTION 143(3) OF THE ACT VIDE AN ORDER DATED 28.03.2013 T HE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESSING OFFICER AT RS.24 20 10 570/-. THE SAID ASSESSMENT WAS SUBSEQUENTLY REOPENED BY TH E ASSESSING OFFICER AND A NOTICE UNDER SECTION 148 WAS ISSUED BY HIM TO THE ASSESSEE ON 21.03.2017 AFTER RECORDING THE REASONS. IN COMPLIAN CE WITH THE SAID NOTICE THE RETURN OF INCOME WAS FILED BY THE ASSES SEE ON 20.04.2017 ITA NO. 1975/KOL/2018 ASSESSMENT YEAR: 2010-2011 DILIP B. DESAI 2 DECLARING THE SAME INCOME OF RS.24 20 10 570/- AS D ISCLOSED IN THE RETURN OF INCOME ORIGINALLY FILED ON 14.10.2010. IN THE AS SESSMENT COMPLETED UNDER SECTION 147/143(3) OF THE ACT VIDE AN ORDER D ATED 29.12.2017 THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESSING OFFICER AT RS.24 45 15 490/- AFTER MAKING A DISALLOWANCE OF RS .21 75 217/- ON ACCOUNT OF EDUCATION CESS AND DISALLOWANCE OF RS.3 29 519/- UNDER SECTION 14A OF THE ACT. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 147/143(3) OF THE ACT AN APPEAL WAS PREFERRED BY T HE ASSESSEE BEFORE THE LD. CIT(APPEALS) CHALLENGING THE VALIDITY OF TH E ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECTION 147/143(3) OF T HE ACT AS WELL AS DISPUTING INTER ALIA THE ADDITIONS OF RS.21 75 217/ - AND RS.3 29 519/- MADE THEREIN ON ACCOUNT OF DISALLOWANCE OF EDUCATIO N CESS AND DISALLOWANCE UNDER SECTION 14A RESPECTIVELY. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(APPEALS) A DETAILED SUBMISSION WAS FILED BY THE ASSESSEE IN SUPPORT OF HIS CASE ON ALL THESE THREE ISSUES. THE LD. CIT(APPEALS) HOWEVER DID NOT FIND MERIT I N THE SAME AND UPHOLDING THE VALIDITY OF THE ASSESSMENT MADE BY TH E ASSESSING OFFICER UNDER SECTION 147/143(3) OF THE ACT HE ALSO CONFIR MED BOTH THE ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLO WANCE OF EDUCATION CESS AND DISALLOWANCE UNDER SECTION 14A. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS) THE ASSESSEE HAS PREFERRED THIS A PPEAL BEFORE THE TRIBUNAL. 4. IN GROUNDS NO. 1 TO 4 THE ASSESSEE HAS RAISED A PRELIMINARY LEGAL ISSUE CHALLENGING THE VALIDITY OF THE ASSESSMENT MA DE BY THE ASSESSING OFFICER UNDER SECTION 147/143(3) OF THE ACT ON VARI OUS COUNTS. ONE OF THE GROUNDS TAKEN BY THE ASSESSEE IS THAT THE ASSESSMEN T ORIGINALLY COMPLETED BY THE ASSESSING OFFICER UNDER SECTION 14 3(3) OF THE ACT WAS REOPENED BY HIM ON THE BASIS OF THE SAME SET OF FAC TS AND THE SAME MATERIAL AS WAS AVAILABLE AT THE TIME OF MAKING THE ASSESSMENT ORIGINALLY ITA NO. 1975/KOL/2018 ASSESSMENT YEAR: 2010-2011 DILIP B. DESAI 3 UNDER SECTION 143(3) AND THERE BEING NO NEW MATERIA L COMING TO THE POSSESSION OF THE ASSESSING OFFICER THE REOPENING OF ASSESSMENT WAS BASED ON A MERE CHANGE OF OPINION WHICH IS NOT PER MISSIBLE IN LAW. TO SUPPORT AND SUBSTANTIATE THIS CONTENTION SHE HAS I NVITED OUR ATTENTION TO THE REASONS RECORDED BY THE ASSESSING OFFICER FOR R EOPENING THE ASSESSMENT WHICH AS GIVEN ON PAGE NO. 23 OF THE PA PER BOOK ARE EXTRACTED BELOW: IN THE INSTANT CASE THE ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 2010-11 ON 14.10.2010 DECLARING TOTAL INCO ME AT RS.24 20 10 750/-. THE ASSESSMENT WAS COMPLETED VID E ORDER U/S 143(3) OF THE I.T. ACT 1961 ON 28.03.2013 AT A SSESSED INCOME OF RS 24 20 10 750/-. SUBSEQUENTLY IT IS OBSERVED THAT THE ASSESSEE HAS D EBITED PROVISION FOR TAX FOR RS.7 49 33 646/- IN HIS PRO FIT AND LOSS ACCOUNT FOR THE PREVIOUS YEAR ENDED ON 31.03.2010. HOWEVER THE ASSESSEE HAS ADDED BACK AN AMOUNT OF RS.7 27 58 429/- ONLY AS PROVISION FOR INCOME TAX IN THE COMPUTATIO N SHEET OF TOTAL INCOME TO ARRIVE AT THE RETURNED INCOME FOR T HE PREVIOUS YEAR ENDED ON 31.03 2010. AS PER THE PROVI SIONS OF SECTION 40(A)(II) OF THE I. T. ACT 1961 ANY DEDUCT ION CLAIMED ON ACCOUNT OF PROVISION FOR TAX IS AN INADMISSIBLE EXPENSES AND CANNOT BE ALLOWED. HENCE THE DEDUCTION CLAIMED ON ACCOUNT OF PROVISION FOR TAX TO THE EXTENT OF RS.2 1 75 217/- I.E. (RS.7 49 33 646/- - RS 7 27 58 429/-) SHOULD ALSO HAVE BEEN ADDED BACK IN THE COMPUTATION SHEET OF TOTAL I NCOME TO ARRIVE AT THE RETURNED INCOME FOR THE PREVIOUS YEA R ENDED ON 31.03.2010 BY THE ASSESSEE. SINCE THIS WAS NOT DON E THERE IS AN OMISSION AND FAILURE ON THE PART OF ASSESSEE TO SUCH AN EXTENT. FURTHER THE DEDUCTION CLAIMED ON ACCOUNT OF PROVISI ON FOR TAX TO THE EXTENT OF RS.21 75 217/- I.E. (RS.7 49 33 646/- - RS.7 27 58 429/-) SHOULD HAVE BEEN DISALLOWED AND ADDED BACK ALSO IN THE ASSESSMENT ORDER DATED 28.03.2013 WHICH HAS NOT BEEN DONE. HENCE I HAVE REASON TO BELIEVE THAT DUE TO ALLOWAN CE OF THE DEDUCTION CLAIMED ON ACCOUNT OF PROVISION FOR TAX TO THE EXTENT OF RS 21 75 217/- AN INCOME TO SUCH AN EXTE NT HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 14 7 OF THE I. T. ACT 1961 . I THEREFORE REQUEST YOU TO KINDLY ACCORD NECESSAR Y APPROVAL TO INITIATE PROCEEDINGS U/S.147 OF THE I.T. ACT 196 1 & TO ISSUE NOTICE U/S.148 OF THE I.T. ACT 1961 IN THIS CASE. ITA NO. 1975/KOL/2018 ASSESSMENT YEAR: 2010-2011 DILIP B. DESAI 4 5. AS IS EVIDENT FROM THE REASONS RECORDED BY THE A SSESSING OFFICER THE ASSESSMENT ORIGINALLY COMPLETED BY HIM UNDER SE CTION 143(3) OF THE ACT WAS REOPENED BY HIM ON THE BASIS OF THE SAME SE T OF FACTS AND THE SAME MATERIAL AS WAS AVAILABLE WITH HIM AT THE TIME OF COMPLETING THE ASSESSMENT ORIGINALLY UNDER SECTION 143(3) AND THER E IS NO NEW INFORMATION OR MATERIAL MUCH LESS TANGIBLE MATERIA L COMING TO HIS POSSESSION AFTER THE COMPLETION OF THE ORIGINAL ASS ESSMENT WHICH HAS BEEN REFERRED TO OR RELIED UPON BY HIM IN THE REASO NS RECORDED TO FORM THE BELIEF ABOUT THE ESCAPEMENT OF ANY INCOME OF TH E ASSESSEE FROM THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION. EVEN T HE LD. D.R. HAS NOT BEEN ABLE TO POINT OUT ANY SUCH INFORMATION OR MATE RIAL WHICH HAS BEEN REFERRED TO OR RELIED UPON BY THE ASSESSING OFFICER IN THE REASONS RECORDED TO FORM THE BELIEF REGARDING THE ESCAPEMEN T OF ANY INCOME OF THE ASSESSEE FROM THE ASSESSMENT. 6. IN THE CASE OF CIT VS.- KELVINATOR OF INDIA LIM ITED (320 ITR 561) HONBLE SUPREME COURT HAS HELD THAT AFTER THE AMEND MENT MADE WITH EFFECT FROM 1 ST APRIL 1989 IN THE RELEVANT PROVISIONS THE ASSESS ING OFFICER HAS TO REASON TO BELIEVE THAT INCOME HAS ES CAPED ASSESSMENT BUT THIS DOES NOT IMPLY THAT THE ASSESSING OFFICER CAN REOPEN AN ASSESSMENT ON THE MERE CHANGE OF OPINION. EXPLAINING FURTHER THE HONBLE APEX COURT HAS OBSERVED THAT THE CONCEPT OF CHANGE OF OPINION HAS BEEN TREATED AS AN IN-BUILT TEST TO CHECK ABUSE OF POWER AND HENCE THE ASSESSING OFFICER EVEN AFTER THE AMENDMENT MADE IN THE RELEVANT PROVI SIONS FROM 1 ST APRIL 1989 HAS POWER TO REOPEN AN ASSESSMENT PROVIDED THA T THERE IS TANGIBLE MATERIAL TO COME TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM ASSESSMENT. IF THE FACTS OF THE PRESENT CASE A RE CONSIDERED IN THE LIGHT OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF KELVINATOR OF INDIA LIMITED (SUPRA) WE FIND THAT T HE REOPENING OF ASSESSMENT MADE BY THE ASSESSING OFFICER WAS BAD-IN -LAW AS THE SAME WAS BASED MERELY ON THE CHANGE OF OPINION AND THE A SSESSMENT COMPLETED BY HIM UNDER SECTION 147/143(3) IN PURSUANCE THEREO F IS LIABLE TO BE ITA NO. 1975/KOL/2018 ASSESSMENT YEAR: 2010-2011 DILIP B. DESAI 5 CANCELLED BEING INVALID. WE ACCORDINGLY CANCEL THE ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECTION 147/143(3) AND ALLOW THE RELEVANT GROUND OF THE ASSESSEES APPEAL. 7. AS A RESULT OF THE DECISION RENDERED ABOVE ON TH E PRELIMINARY LEGAL ISSUE CANCELLING THE ASSESSMENT MADE BY THE ASSESSI NG OFFICER UNDER SECTION 147/143(3) THE OTHER GROUNDS RAISED BY THE ASSESSEE IN HIS APPEAL HAVE BECOME INFRUCTUOUS AND WE DO NOT CONSID ER IT NECESSARY OR EXPEDIENT TO ADJUDICATE UPON THE SAME. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON FEBRUARY 28 2020. SD/- SD/- (SATBEER SINGH GODARA) (P.M. JAGTAP) JUDICIAL MEMBER VICE-PRESIDENT) KOLKATA THE 28 TH DAY OF FEBRUARY 2020 COPIES TO : (1) DILIP B. DESAI CONSTANTIA B WING 7 TH FLOOR MINTO PARK 11 DR. U.N. BRAHMACHARI STREET KOLKATA-700017 (2) ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-4(2) KOLKATA AAYAKAR BHAWAN POORVA 110 SHANTIPLLY 5 TH FLOOR KOLKATA-700107 (3) COMMISSIONER OF INCOME TAX (APPEALS)-21 K OLKATA; (4) CIT- KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES KOLKATA LAHA/SR. P.S.