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Income Tax Appellate Tribunal, A BENCH, PUNE
Before: SHRI S.S. GODARA & DR. DIPAK P. RIPOTE
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE
BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER ITA Nos.883, 884 & 885/PUN/2016 (Assessment Years: 2006-07, 2007-08 & 2008-09) Mrs. Pushpa G. Bansal, Pr. Commissioner of Income Allround Cargo Carriers, Vs. Tax-1, Nashik G-1,Prestige Point, Opp. Nashik Road, Police Station, Nashik-422101 PAN : AGRPB5196R
Appellant Respondent Appellant by: Shri Sanket Milind Joshi Respondent by: Shri Shivraj B. Moray Date of Hearing: 04.05.2022 Date of Pronouncement: 12 .05.2022 O R D E R Per S.S. Godara, JM These assessee’s three appeals for AYs 2006-07, 2007-08 & 2008-09 arise against the Pr. CIT-1, Nashik’s common order dated 29.03.2016 passed in case Nos.Nsk/Pr.CIT-I/u/s263/2015-16 terming the corresponding assessments/reassessments framed on 28.03.2013 as erroneous one causing prejudice to interest of revenue, in proceedings under Section 263 of the Income Tax Act, 1961 (in short the Act).
Heard both parties. Case files perused.
It emerges at the outset that the assessee’s identical substantive grievance in all these three cases seeks to reverse the PCIT’s revision directions in exercise of section 263 proceedings thereby holding that the
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assessing authority’s as many reassessment issue had been framed without even examining or making section 194C r.w.s. 40(a)(ia) disallowance qua the payment(s) of transport charges without deducting TDS thereupon.
The assessee at this stage invited our attention to her identical additional substantive ground(s) raised in as many three petitions that once the Assessing Officer reopening reasons recorded in these three assessment years are not sustainable, these reassessments deserve to be quashed as non est leading to annulment of the PCIT’s revision orders as well.
Learned CIT-DR vehemently opposed the admission of assessee’s foregoing additional substantive ground at this belated stage.
We find no merit in the Revenue’s instant technical objections pleading estoppel as well as approbate and reprobate in the light of Hon’ble apex court’s landmark judgment in NTPC vs. CIT (1998) 229 ITR 383 (SC); as considered the tribunal’s Special Bench decision in the case of All Cargo Global Logistic Ltd. vs. DCIT (2012) 137 ITD 287 (Mum) (SB), that this tribunal can very well entertain a pure question of law going to route of the mater so as to determine the correct tax liability of an assessee provided all the relevant facts form part of the records. We make it clear that the assessee’s detailed paper book running into 150 pages has already placed on record the corresponding reopening reasons in all these three assessment years. We thus admit the assessee’s forgoing additional substantive ground in these circumstances.
We further wish to observe here that this tribunal various Co-ordinate benches decision M/s. Classic Flour and Food Processing Pvt. Ltd. Vs. DCIT
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in ITA Nos. 764 to 766/KOL/2014 (and other similar cases) order dated 05.04.2017 holds that an assessment is in the nature of primary and section 263 revision exercise amounts to collateral proceedings wherein the forming validity could very well be challenged to the extent of correctness of CIT’s revision action only. Learned co-ordinate bench taken note of (1955) 1 SCR 117 (SC) in Kiran Singh and Others Vs. Chaman Paswan and Others holding that a decree passed by a court without jurisdiction is a nullity which could always be challenged in execution proceedings as well. The assessee further placed reliance on Deep Chand Kothari Vs. CIT 1988 171 ITR 381 (Raj.) that such basic principles of civil jurisprudence apply in tax proceedings. We hold in view of foregoing list of precedents that defect in primary proceedings strikes at the very authority in collateral exercise which is not curable by consent of the parties. We accordingly conclude that the assessee before us is very much entitled to challenge correctness of the primary proceedings to the limited extent of correctness of the instant section 263 revision actions only.
We now advert to the Assessing Officer identical reopening reasons forming subject matter of challenge in this additional substantive ground. Page No. 34 in assessee’s paper book contains the reopening reasons for AY 2006-07 as under :
“On verification of the records for A.Y. 2006-07 in case of the above mentioned assessee revealed that the assessee is in the business of transportation. The assessee has paid Rs.69,28,014/- as vehicle hire charges for her business but in clause 27 of Form 3CD for the Tax Audit Report of the assessee, the C.A. certified that the assessee is not liable to deduct tax at source. The vehicle hire charges of Rs.69,28,014/- has been reflected as purchase in the P & L account of the assessee for the A.Y. 2006-07. The expenditure on payment for vehicle hire charges needs to be disallowed due to non deduction of TDS on the such payments by the assessee. Hence there is escapement of income to the tune of Rs.69,28,014/- for A.Y. 2006-07.”
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There is hardly any dispute between the parties that the assessing authority had recorded similar reopening reasons in latter twin assessment years i.e. A.Ys. 2007-08 and 2008-09 as well which are very much compiled in the instant paper book. The sole difference is only qua assessee’s payments made.
We observe in light of above extracted re-opening reasons that the assessing authority had indeed failed to indicate as to under which provision of law in Chapter XVII of the Act the assessee was liable to deduct TDS on her impugned payments. The Revenue sought to highlight at this stage that the Pr.CIT has made it clear in the impugned revision directions that the assessee made contractual payments liable for TDS deduction u/s. 194C of the Act. We find no merit in the Revenue’s instant arguments once it is clear that the assessing authority had not specified in the reopening reasons about applicability of the particular statutory provision requiring TDS deduction or for that even suggest that the assessee’s payments were in the nature of contractual expenses involving TDS deduction u/s. 194C of the Act or any other provision as the case may be. And further that there existed contractual relationship between payer-payees hereunder. We thus quote hon’ble jurisdictional high court’s landmark decision in Hindustan Unilever Ltd. Vs. R B Wadkar (2004) 268 ITR 332 (Bom) and the Assessing Officer’s reopening reasons have to be read on standalone basis without any external help thereby rejecting any scope of addition, deletion or substitution therein at a later stage even it is found that at some point of time that the same were very well justifiable. We adopt the very reasoning cause hereinabove to quash all these three reassessments herein framed in 28-03-2013 as non-nest. We order accordingly. We also invoke “sublato fundamento cadit opus” that once the foundation of reopening is removed, collateral proceedings u/s. 263 in
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issues also follows the section as having no legs to stand. The assessee’s foregoing identical additional substantive ground raised in all these three appeals succeeds thereby rendering all other pleadings on merits as well as validity (regarding applicability of section 147 1st proviso in assessment years i.e. AYs 2006-07 and 2007-08) as infructuous. Ordered accordingly.
Theses assessee’s three appeals are allowed in above terms. A copy of the common order be placed in the respective case files.
Order pronounced in the open court on 12th May, 2022.
Sd/- Sd/- (Dipak P. Ripote) (S.S. Godara) Accountant Member Judicial Member पुणे / Pune; दिन ांक / Dated : 12th May, 2022. रवि
आिेश की प्रविविवप अग्रेविि / Copy of the Order forwarded to : अपीि र्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2. 3. The Pr. CIT-1, Nashik 4. DR, ITAT, “A” Bench, Pune. ग र्ड फ़ इि / Guard File. 5. //सत्य वपि प्रवि// True Copy// आिेश नुस र / BY ORDER,
िररष्ठ वनजी सविि / Sr. Private Secretary आयकर अपीिीय अविकरण ,पुणे / ITAT, Pune