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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI A.MOHAN ALANKAMONY & SHRI DUVVURU RL REDDY
आदेश / O R D E R
Per A. Mohan Alankamony, AM:-
This appeal by the assessee is directed against the order passed by the learned Commissioner of Income Tax(Appeals)-5, Chennai, dated 03.01.2018 in for the assessment year 2009-10 passed U/s. 250(6) r.w.s. 143(3) & 147 of the Act.
The assessee has raised several grounds in his appeal however the cruxes of the issues are that (i) The Ld.CIT(A) has erred in upholding the reopening of assessment U/s.147 of the Act. (ii) The Ld.CIT(A) has erred in confirming the addition made by the Ld.AO towards unexplained cash credit U/s.68 of the Act.
The brief facts of the case are that the assessee is an individual earning income from salary, filed his return of income for the assessment year 2009-10 on 17.07.2009 admitting total income of Rs.1,70,800/-. Initially the return was processed U/s.143(1) of the Act on 24.11.2011 and subsequently the case was selected for scrutiny under CASS, since it came to the notice of the Revenue through AIR that there were cash deposits of Rs.27,16,000/- in the SB account of the assessee. Accordingly notice U/s.143(2) of the Act was duly served on the assessee. Finally the assessment order was passed U/s.143(3) of the Act on 20.12.2011 wherein the Ld.AO made addition of Rs.69,200/- towards salary income and Rs.2,00,000/- towards income from undisclosed sources. Thereafter once again the Ld.AO reopened the case of the assessee U/s.147 r.w.s 148 of the Act on the very same issue that the assessee had deposited cash in his SB account maintained with Dena Bank for Rs.27,16,000/- and the assessment was completed vide order dated 30.06.2016 wherein the Ld.AO made addition for Rs.27,16,000/- with respect to the cash deposit in the bank invoking the provisions of Section 68 of the Act. On appeal, the Ld.CIT(A) confirmed the order of the Ld.AO with respect to reopening U/s.147 and also on merits.
At the outset the Ld.AR submitted before us that the case of the assessee was reopened U/s.147 r.w.s.148 of the Act earlier based on the information collected through AIR that the assessee had deposited Rs.27,16,000/- in his savings bank account maintained with Dena Bank, Purasawakkam Branch. In that proceedings the Ld.AO vide order dated 20.12.2011 after verifying the details submitted by the assessee made addition against salary income for Rs.69,200/- and cash deposits for Rs.2,00,000/- and there was no other addition pertaining to the cash deposit in bank account. Thereafter beyond the period of 4 years, the Ld.AO once again reopened the case of the assessee U/s.147 & 148 of the Act on the very same issue of cash deposit of Rs.27,16,000/- in his savings bank account maintained with Dena Bank, Purasawakkam Branch. The Ld.AR argued by stating that reopening the assessment U/s.147 r.w.s. 148 of the Act beyond 4 years on the very same issue towards which the assessment was reopened earlier invoking the provisions of Section 147 r.w.s. 148 of the Act, is bad in law. He further argued stating that the Ld.CIT(A) without application of mind has simply agreed with the view of the Ld.AO on the issue. The Ld.AR further relied in the decisions rendered in the following cases:-
(i) Hon’ble High Court of Gujarat in the case M/s. Krupesh Ghanshyambhai Thakkar vs. Deputy Commissioner of Income Tax reported in [2017] 77 taxmann.com 293 (Gujarat). (ii) Hon’ble High Court of Gujarat in the case M/s. Tirupati Foam Ltd., vs. Deputy Commissioner of Income Tax reported in [2017] 81 taxmann.com 350 (Gujarat). (iii) Hon’ble High Court of Rajasthan in the case Smt. Kiran Kanwar vs. Union of India reported in [2017] 81 taxmann.com 281 (Rajasthan). (iv) Hon’ble Apex Court in the case of Income Tax Officer vs. TechSpan India (P.) Ltd., reported in [2018] 92 taxmann.com 361 (SC). (v) Hon’ble High Court of Madras in the case M/s. Fenner (India) Ltd., vs. Deputy Commissioner of Income Tax reported in [1999] 107 taxmann.com 53 (Madras).
The Ld.DR could neither controvert to the facts submitted by the Ld.AR before us nor deny that the decision cited by the Ld.AR does not apply to the case of the assessee.
We have heard the rival submissions and carefully perused the materials on record. From the facts of the case, it is apparent that the assessment is reopened beyond the period of 4 years from the end of the relevant assessment year. Further it is also apparent that the case of the assessee is reopened on the very same issue wherein on the earlier occasion the case was reopened and after examining the issue order was passed by making certain additions. In this situation, it is relevant to examine the decisions rendered by the Higher Judiciaries cited by the Ld.AR. (i) Decision of the Hon’ble High Court of Gujarat in the case M/s. Krupesh Ghanshyambhai Thakkar vs. Deputy Commissioner of Income Tax reported in [2017] 77 taxmann.com 293 (Gujarat) wherein it was held that “Under the guise of reopening of the assessment, the Assessing Officer wants to have a roving inquiry. Even as per the Assessing Officer in the reasons recorded has specifically mentioned that for the purpose of verification/deep verification of the claim, it is necessary to reopen the assessment. Under the circumstances, it cannot be said that the Assessing Officer had any tangible material to form an opinion that the income
chargeable to tax has escaped the assessment. Under the circumstances, the impugned action of reopening of the assessment in exercise of power under section 148 for the reasons recorded hereinabove cannot be sustained. [Para 13]”. (ii) Decision of the Hon’ble High Court of Gujarat in the case M/s. Tirupati Foam Ltd., vs. Deputy Commissioner of Income Tax reported in [2017] 81 taxmann.com 350 (Gujarat) wherein it was “Held that where the issue of accounting treatment in respect of the unutilized Cenvat credit for the purpose of the valuing the closing stock was already examined by the Assessing Officer during the scrutiny assessment, reassessment proceedings on the same issue without any tangible material was mere a change of opinion and, hence, not sustainable.” (iii) Decision of the Hon’ble High Court of Rajasthan in the case Smt. Kiran Kanwar vs. Union of India reported in [2017] 81 taxmann.com 281 (Rajasthan) wherein it was “Held that on earlier occasion the Assessing Officer himself had disallowed land consolidation expenses to certain extent after consideration of the materials on the record. It was the very same return which was sought to be reopened. There was no reason to hold that the assessee had not disclosed fully and truly all material facts in the earlier assessment. Therefore reopening of assessment was not valid. (iv) Decision of the Hon’ble Apex Court in the case of Income Tax Officer vs. TechSpan India (P.) Ltd., reported in [2018] 92 taxmann.com 361 (SC) wherein it was held that “Section 147 does not allow the re-assessment of an income merely because of the fact that the Assessing Officer has a change of opinion with regard to the interpretation of law differently on the facts that were well within his knowledge even at the time of assessment. Doing so would have the effect of giving the Assessing Officer the power of review and section 147 confers the power to re-assess and not the power to review. [Para 9]”. (v) Decision of the Hon’ble High Court of Madras in the case of M/s. Fenner (India) Ltd., vs. Deputy Commissioner of Income Tax reported in [1999] 107 taxmann.com 53 (Madras) wherein it was held that “Therefore, it was clear that the escapement of income, if any, on this account was not on account of any failure on the assessee’s part to disclose the material facts fully and truly. The notice issued by the Assessing Officer in exercise of his power under section 147, therefore, could not be sustained.”
From the above, it is clear that reopening of the assessment invoking the provisions of Section 147 r.w.s. 148 of the Act on the very same issue which was already examined and adjudicated earlier by reopening the assessment U/s.147 r.w.s. 148 of the Act is bad in law. Further in the case of the assessee, there was no failure on his part to disclose fully and truly all material facts necessary for making the assessment and the Ld.AO had ventured to reopen the case of the assessee beyond the period of 4 years from the end of the relevant assessment year, which is also erroneous. Therefore relying on the decisions of the various Hon’ble Higher Judiciaries cited herein above We are of the considered view that reopening of the assessment by the Ld.AO for the second time based on the very same issue and that too beyond the period of 4 years from the relevant assessment year is bad in law. Hence we hereby set aside the order of the Ld.CIT(A) and further quash the order of the Ld.AO passed U/s.143(3) r.w.s. 147 & 148 of the Act dated 30.06.2016.
6.1 Since we have set aside the order of the Ld.CIT(A) and quashed the order of the Ld.AO on jurisdiction, we do not find it necessary to adjudicate the ground with respect to merits as it would be only academic.
In the result the appeal of the assessee is allowed.
Order pronounced on the 16th November, 2018 at Chennai.