M\S MAJESTIC SALES PROMOTION PVT. LTD.,KOLKATA vs. DCIT, CIR. 8(1), KOLKATA

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ITA 47/KOL/2024Status: DisposedITAT Kolkata28 March 2025AY 2010-114 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reassessment proceedings initiated under Section 147 by issuing a notice under Section 148 on March 22, 2018, for AY 2011-12, were invalid and illegal. The Tribunal noted that the original assessment under Section 143(3) was completed on March 24, 2014. The reopening occurred after a period of four years from the end of the relevant assessment year. The Tribunal observed that the reasons recorded for reopening did not mention any failure on the part of the assessee to truly and materially disclose any information during the original assessment proceedings, which resulted in the escapement of income. Therefore, the reopening was in violation of the first proviso to Section 147 of the Act. The Tribunal relied on the decision of the Hon'ble Apex Court in ACIT vs. CEAT Ltd. [2023] 146 taxmann.com 108 (SC), which laid down that reassessment is invalid if not in consonance with the proviso to Section 147. Consequently, the appeal of the assessee was allowed. The issue in ITA No. 47/KOL/2024 for AY 2010-11 was similar, and the same decision was applied, leading to the allowance of that appeal as well.

What were the facts?

The assessee, M/s Majestic Sales Promotion Pvt. Ltd., filed appeals against the orders of the National Faceless Appeal Centre, Delhi, for Assessment Years (AYs) 2010-11 and 2011-12. For AY 2011-12, the assessee's original assessment under Section 143(3) was completed on March 24, 2014. The case was subsequently reopened under Section 147 by issuing a notice under Section 148 on March 22, 2018, after receiving information from the investigation wing regarding accommodation entries of ₹35.00 lacs. The Assessing Officer (AO) made an addition of ₹35.00 lacs on account of unexplained cash credit. The assessee contended that the reassessment proceedings were initiated after four years from the end of the assessment year without any failure on the assessee's part to disclose material facts, rendering the proceedings without jurisdiction and barred by limitation. The Ld. CIT(A) did not specifically adjudicate this issue.

What were the issues?

1. Whether the reassessment proceedings initiated after four years from the end of the assessment year, without there being a failure on the part of the assessee to disclose fully and truly any material facts, are without jurisdiction and barred by limitation, as per the first proviso to Section 147 of the Income Tax Act, 1961. Assessee's Contention: The assessee argued that the reopening of assessment under Section 147 by issuing a notice under Section 148 on March 22, 2018, for AY 2011-12, which ended on March 31, 2012, was done after four years from the end of the assessment year. The assessee contended that there was no failure on its part to disclose fully and truly any material facts during the original assessment proceedings. Therefore, the reopening was beyond the period of limitation prescribed by the first proviso to Section 147 and was without jurisdiction. Revenue's Contention: The judgment does not record any specific contention from the revenue regarding this issue.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 143(3)

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Income Tax Appellate Tribunal, “B” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRI SONJOY SARMA, JM

For Appellant: Shri Abhishak Bansal, AR
For Respondent: Shri B. Satyanarayana Raju, DR
Hearing: 24.02.2025Pronounced: 28.03.2025
1.

These are appeals preferred by the assessee against the orders of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 11.10.2023 & 12.10.2023 for the AYs 2010-11 & 2011-12 respectively.

ITA No. 48/KOL/2024 for A.Y. 2011-12

2.

At the time of hearing, the assessee only pressed ground no.4, which is extracted as under:-

“4. For that the re-assessment proceedings initiated after 4 years from the end of assessment year without there being failure on the part of the assessee to disclose fully and truly any material facts is without jurisdiction being barred by limitation.” 03. The facts in brief are that the assessee filed the return of income on 13.09.2011, declaring total income at ₹12,83,718/-. The case of the

4.

The said issue was raised before the ld. CIT (A) by way of raising ground no. 1 and 2 in an appeal , however, there was no specific adjudication on this issue by the ld. Commissioner of Income-tax (Appeals).

47/KOL/2024 for A.Y. 2010-12

6.

The issue raised in this appeal is similar to one as decided by us in ITA No. 48/KOL/2024. Accordingly, our decision would apply mutatis

7.

In the result, the appeals of the assessee are allowed.

Order pronounced in the open court on 28.03.2025.

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