ASST. COMMISSIONER OF INCOME TAX, CIRCLE-1, KADAPA vs. P.MAHESWARA REDDY, KADAPA

We notice at the outset with the able assistance of both the parties that Revenue’s sole substantive grievance pleaded in the instant appeal seeks to reverse the CIT(A)’s action quashing the impugned reopening vide following detailed discussion :

I have carefully considered the submissions and the case law relied upon by the learned AR. I find that the original assessment was made u/s 143(3). Notice u/s 148 was issued after a period of four years. No information came to the knowledge of the AO after completion of the regular assessment. Keeping in view, the decision of Hon'ble Supreme Court in the case of Girilal & Co. Vs. ITO & Others (387 ITR 122). In this case the Hon'ble Supreme Court held that there is no finding of the AO that the information was not available in the assessment records or that there was a failure of the assessee to disclose fully and truly all material facts before him. Further, the decision of Hon'ble Andhra Pradesh High Court In the case of Mahalaxmi Motors ltd vs, Dy.CIT reported in (2004) (265 ITR 53) has held that where all the facts were available before the assessing authority While making te original assessment and the assessing authority allowed the claim, the Department cannot reopen the assessment even if there is loss of revenue or even if legal inferences drawn by the assessee is erroneous in the first place when full and true disclosure of the facts was made by the assessee. I also find that the seigniorage charges is a revenue expenditure incurred by a contractor. I represents the amount paid to the government for obtaining permissions to mine granite stone for the purpose of construction. This amount is a revenue item of expenditure and was correctly allowed by AO at the time of completion of the assessment u/s 143(3) of the I.T. Act on 22.03.2011. 7. In view of the above and in view of the submissions made by the learned AR, I hold that the initiation of proceedings u/s.147 as invalid. The assessment is accordingly annulled.”

It emerges from a perusal of the case records that we are in Assessment Year 2009-10 involving section 143(3) assessment framed on 23.2.2011 followed by Assessing Officer’s initiation of 148/147 proceedings vide notice dt.24.4.2014. This is thus a case of the impugned proceedings having been initiated beyond the prescribed period of four years from the end of the relevant assessment year covered under section 147 1st proviso. The Revenue has not filed to place on record any material that the Assessing Officer had attributed the reason of assessee's income having escaped assessment due to failure on his part to “fully” and “truly” disclose the relevant particulars in the first half. The CIT(A) has already taken note of various judicial precedents (supra) whilst annulling the Assessing Officer’s action to this effect. We therefore find no reason to express our disagreement thereto. The Revenue’s sole substantive grievance is rejected accordingly.

This Revenue’s appeal is dismissed. Order pronounced in the open court on 24th Aug., 2021. Sd/- Sd/- (L.P. SAHU) (S.S. GODARA) Accountant Member Judicial Member Hyderabad, Dt.24.08.2021. * Reddy gp Copy to :