Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “H”
ITO 9(1)(2) Amolika Constructions Room No. 260A, 2nd floor, Pvt. Ltd. 1108, 11th floor, Samarth बिधम/ AayakarBhavan, M. k. Road, Mmbai-400020. Vaibhav, New Link Road, Vs. Andheri West, Mumbai-400053 स्थायीलेखासं./जीआइआरसं./PAN No. AAGCA4658K (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : अपीलाथीकीओरसे/ Appellant by : Dr. P. Daniel, AR प्रत्यथीकीओरसे/Respondentby : Sh. M. C. Omi Ningshen, DR सुनवाईकीतारीख/ : 09.04.18 Date of Hearing घोषणाकीतारीख / : 18/04/18 Date of Pronouncement आदेश / O R D E R
Per Sandeep Gosain, Judicial Member:
1. The present two Appeals have been filed by the assessee against the order of Commissioner of Income Tax (Appeals)-
2. Since the issues raised in these two appeals are identical, therefore, for the sake of convenience, these two appeals are clubbed, heard and disposed of by this consolidated order.
(AY 2007-08) 3. First of all we take up assessee’s appeal in (AY 2007-08)on the grounds mentioned herein below:-
The Ld. A.O. failed to appreciate that the original assessment is completed u/s. 143(3) dated 29-12-2009 of the 1.1. Act, 1961 by his predecessor after full verification of the facts arid details.
The reopening is in valid in law and in facts because the notice U/s. 148 is served after 6 years from the end of relevant assessment year and no new material has come on record.
3 & 506/Mum/2018 Amolika Constructions Pvt. Ltd. 3. The Ld. A.O. failed to appreciate that there is no documentary evidence against the appellant company to support such impugned additions. The Ld. AO. foiled to appreciate that the statements of any person recorded U/s. 131 or otherwise do not trigger any adverse order against the appellant and in such case, the burden of proving what is alleged n the assessment order is on the Ld. A.O.
4. The Ld. A.O. ought to have appreciated that in the original assessment U/s. 143(3) and -in this assessment U/s. 143(3) read with U/s. 147, the appellant company has fully discharged burden of proof, onus of proof and explained the source of share capital and advances received by establishing the identity, credit worthiness and transaction by honking instruments with documentary evidences.
5. The Ld. A.O. failed to appreciate that the appellant company substantiated the details with the documentary evidences as extracted from the website of Ministry of corporate affairs, Government of India. In this assessment order, t c Ld. A.C. could not rebut any of the facts and documentary evidence submitted by the appellant company.
4 & 506/Mum/2018 Amolika Constructions Pvt. Ltd. 6. The Ld. AO. erred on facts and in law in making the impugned addition of Rs. 1,20,00,000/- being share capital of the appellant company.
7. The Ld. A.O. failed to appreciate that there is no share application credited in the book of the appellant company, for which such impugned additions is made by the Ld. A.O.
8. The Ld. A.O. ought to have appreciated that appellant company disclosed all the details, and materials truly and no income is concealed and the original order u/s. 143(3) was passed. The Ld. A.O. did not find any lacuna in the original order U/s. 143(3).
The case law cited by the Ld. A.O. in the assessment order do not apply to the facts of this case.
ADDITIONAL GROUNDS OF APPEAL
1. The Ld. A.O, erred in reopening the Assessment u/s 147 after the period of 4 years when he did not mention that assessee’s income has escaped assessment due to failure on the part of assessee and hence reopening is invalid.
5 & 506/Mum/2018 Amolika Constructions Pvt. Ltd.
The brief facts of the case are thatthe assessee filedits return of income for the year under consideration declaring total income at Rs. 5,29,200/-. Thereafter the case was selected for scrutiny and after serving statutory notices, assessment u/s 143(3) was completed by the AO on 29.12.09. Subsequently the case was reopened by issuing notices u/s 148 f the I.T. Act on 28.03.14 after receiving information from the investigation wing and reason recorded in writing. Further the assessment u/s 143(3) r.w.s. 147 of the I.T. Act was completed on 31.03.15 determining the total income at Rs. 1,25,29,250 by making addition of Rs. 1.20 crore on account of share capital money u/s 68 of the I.T. Act.
Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties, dismissed the appeal of the assessee and upheld the order of passed by AO u/s 143(3) r.w.s 147 of the I.T. Act. Now before us, the assessee has preferred the present appeal by raising the above grounds.
6 & 506/Mum/2018 Amolika Constructions Pvt. Ltd.
Ld. AR appearing on behalf of the assessee submitted that although the assessee has raised several grounds of appeal as well as additional ground in challenging the action of reopening of section u/s 147 of the I.T. Act after the period of 4 years without mentioning that assessee’s income has escaped assessment due to failure on the part of the assessee. Even no material is on the record against the assessee. The assessment in both the appeals have already been completed as in ITA No. 505/Mum/18, the original assessment was completed u/s 143(3) of the I.T. Act dated 29.12.09 after full verification of the facts and details. In case of ITA No. 506/Mum/18, the assessment was completed u/s 143(1) of the I.T. Act after full verification of the facts and details. At present, Ld. AR has restricted his arguments to a legal point which goes to the roots of the case and also found mentioned in the order sheet dated 19.03.18 which read as under:- The preliminary ground of the assessee relates to the validity of invoking of section 147/148 of the Act for which an Additional Ground of Appeal has also been raised. In this context, one of the point raised is the 7 & 506/Mum/2018 Amolika Constructions Pvt. Ltd. failure of the Assessing Officer to comply with the point of law laid down by the Hon'ble Bombay High Court in the case of Asian Paints Ltd vs. DCIT [296 ITR 90] and Aroni Commercials Ltd. vs. DCII [362 ITR 403] regarding the period of four weeks to be awaited by the Assessing Officer after his order rejecting assessees objections on initiation of section 148 of the Act is served on the assessee. This point requires examination of assessment and other related records of the Assessing Officer and, therefore, at the threshold the Department is directed to produce the relevant record on the next date of hearing for which the learned DR sought time till 09.04.2018. Accordingly, the appeals are adjourned for 09.04.2018. Parties informed in the court.
As per the facts of the case, the legal arguments raised by the assessee are same. Ld. AR submitted that the AO had not complied with the point of law laid down by Hon’ble Bombay High Court in the case of Asian Paints Ltd. Vrs. DCIT (296 ITR 90) and M/s Aroni Commercials Ltd. Vrs. DCIT (362 ITR 403)regarding the period of 4 weeks to be awaited by the 8 & 506/Mum/2018 Amolika Constructions Pvt. Ltd. AO after his order rejecting assessee’s objection on initiation of section 148 of the I.T. Act is served on the assessee.
In the present case, the assessment was originally completed u/s 143(3) of I.T Act on 29.12.09 after issue of notice u/s 143(2) and 142(1) of the I.T. Act 1961. Ld. AR submitted that reasons recorded were asked for by the assessee but the same were not provided by the revenue and even the date of reasons recorded is not available. It was further submitted that assessee filed objection against the reopening on 18.02.15 as the re- assessment proceedings were time barred.
Our attention was drawn on para no. 2.3 of the order of assessment passed u/s 143(3) r.w.s. 147 of the I.T. Act 1961, wherein it has been mentioned by the AO that the objections filed by the assessee were disposed of vide order dated 16.02.15. The rejection of the objections filed by assessee were handed over to assessee’s representative on 27.03.15. The said fact of handing over the rejection of objections filed by the assessee were handed over on 27.03.15 is categorically mentioned in para no. 2.7 of the order of assessment and the final order u/s 143(3) r.w.s. 147 of the I.T. Act was passed by the AO on 31.03.15 which is in clear
9 & 506/Mum/2018 Amolika Constructions Pvt. Ltd. violation of the directions given by Hon’ble Bombay High Court in the case of Asian Paints Ltd. Vrs. DCIT (2008) 296 ITR 90 wherein it has been held as under:- “If the AO does not accept the objections filed by the assessee against reopening of assessment, he is not to proceed further in the matter for a period of four weeks from the date of service of order rejecting the objections on the assessee- above procedure is to be followed strictly in all such cases of reopening of assessment.”
As per the factum of the aforementioned judgment of the 9. jurisdictional High Court it is made clear that if the Assessing Officer does not accept the objections filed by the assessee against reopening of assessment, then, he is not to proceed further in the matter for a period of 4 weeks from the date of service of order rejecting the objections of the assessee. As per the aforementioned judgment, the Hon‟ble Court has directed that the above procedure is to be followed strictly in all such cases of reopening of assessment. However, as per the facts of the preset case and after perusal of the record, we noticed that AO has violated the principle of natural justice as well as the
From the entire reading of the order of assessment, we are of the considered view that the Assessing Officer has dealt with the objections in the assessment order itself in a composite manner. The Assessing Officer should have complied with the point of law laid down by the Hon’ble Bombay High Court in the case of Asian Paints Ltd. Vrs. DCIT (296 ITR 90) and Aroni Commercial Ltd. Vrs. DCIT (362 ITR 403) and has not waited four weeks after the order rejecting the assessee’s objections on initiations of section 148 of the Act. Apart from this, as per the entire order of assessment u/s 143(3) r.w.s. 147 there was no new tangible material on record before the Assessing Officer, and in the absence of any new tangible material on record, the order of the Assessing Officer for reopening is bad in law as has been held in the following judgments. i) Kelvinator India Ltd., (2010) 320 ITR 561 (SC) ii) Kalvinator of India Ltd., (2002) 256 ITR 1 (Del HC) iii) Amitabh Bachchan, (2012) 349 ITR 76 (Bom HC) iv)
11 & 506/Mum/2018 Amolika Constructions Pvt. Ltd. CartiniIndia Ltd., (2009) 314 ITR 275 (Bom HC) v) Asian Paints Ltd., (2009) 308 ITR 195 (Bom HC). Furthermore, we observe that the reasons recorded by the AO nowhere speaks that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment for the AY 2007- 08. Accordingly, issue is squarely covered by the decision of the Hon’ble Bombay High Court in the case of Hindustan Lever Ltd, 137 taxman 479, wherein it was held that as per the proviso to section 147 where assessment is completed u/s 143(3), no reopening can be made u/s 147 after expiry of four years from the end of the relevant assessment year if there is no failure on the part of the assessee to disclose truly and fully all material facts necessary for the assessment. From the record, we found that original assessment u/s 143(3) for the AY 2007-08 was framed on 29.12.09. Thereafter, notice u/s 148 was issued on 28.03.14 i.e. more than four years after completion of relevant assessment year under consideration, for reopening of assessment without mentioning any failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. Accordingly, issue for AY
12 & 506/Mum/2018 Amolika Constructions Pvt. Ltd. 2007-08 is squarely covered by the decision of Bombay High Court in the case of Hindustan Lever Ltd. (supra). We direct accordingly. After considering the entire facts of the case and the legal position in the aforementioned cases, we are of the considered view that there is no need to go further in this case when once we are convinced that principles of natural justice as well as the principles laid down by the above judicial pronouncements have not been fully complied with by the Assessing Officer while passing the order of assessment u/s 143(3) r.w.s. 147 of the Act. Therefore, in our considered view the order passed by the Assessing Officer is bad in law and therefore stands quashed
In the net result, the appeal filed by the assessee is allowed.
ITA No. 506/Mum/2018 (AY 2008-09) 12. Now we take up assessee’s appeal in for AY 2008-09. Since we have already decided the similar grounds of appeal in AY
13 & 506/Mum/2018 Amolika Constructions Pvt. Ltd. 2007-08 on legal issue, therefore following the reasoning given in our own decision in ITA No. 505/Mum/18 except the issue of proviso to section 147 of the I.T. Act, we apply the same principal of law in the present appeal in order to maintain judicial consistency which is applicable mutatis mutandis.
In the net result, both the appeals filed by the assessee stands allowed. Order pronounced in the open court on 18th April, 2018. Sd/- Sd/- (R. C. Sharma) (Sandeep Gosain) लेखासदस्य / Accountant Member न्याययकसदस्य / Judicial Member मुंबई Mumbai;यदनांकDated : 18.04.2018 Sr.PS. Dhananjay आदेशकीप्रनिनिनिअग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलाथी/ The Appellant 2. प्रत्यथी/ The Respondent 3. आयकरआयुक्त(अपील) / The CIT(A) आयकरआयुक्त/ CIT- concerned 4. 5. यवभागीयप्रयतयनयि, आयकरअपीलीयअयिकरण, मुंबई/ DR, ITAT, Mumbai 6. गार्डफाईल / Guard File आदेशधिुसधर/ BY ORDER,