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Income Tax Appellate Tribunal, DELHI BENCH: ‘C’ NEW DELHI
Before: SHRI P.K. BANSAL & SHRI K.N. CHARY
ORDER PER K. NARSIMHA CHARY, J.M.
This is an appeal challenging the order dated 01.02.2016 in appeal no. 159/14-15, A.Y. 2007-08 passed by the Commissioner of Income Tax (Appeals)-1, Gurgaon.
Brief facts of the case are that the assessee is an individual deriving income from hiring of Cabs under the name of M/s Genesis Wheels on rent, Gurgaon. The return of income for the AY 2007-08 was filed on 31.10.2007 declaring a total income of Rs. 409530/-and the assessment u/s 143(3) was completed by way of an order dated 23.12.2009 assessing the same at Rs. 629578/-.
However, later on AO recorded that the assessee had filed to deduct the tax at source on payments made to M/s Gorang Travels, M/s Bedi Tour and Travels and to Sandeep Kataria to a tune of Rs. 54,84,000/-, Rs.12,54,219/- and Rs.2,75,768/- respectively and further difference to a tune of Rs. 7,50,989/- between the gross receipts shown in Profit And Loss Account and gross receipts reflected in Schedule TDS2 of the ITR as such he initiated proceedings u/s 147 by issuance of notice and concluded them by adding all these amounts to the income of the assessee.
Appeal preferred by the assessee before the Ld. CIT (A) ended up in dismissal by way of the impugned order as such the assessee is before us in this appeal challenging the proceedings u/s 147 stating that the authorities below erred in sustaining the additions u/s 147 of the Act.
It is the argument of the Ld. AR that this is a matter of reopening of the assessment after four years, without coming into position of any new material and it cannot be done under proviso to Section 147 of the Act. He submitted that new plea of question of law without requiring any further evidence can be taken at appellate stage also. Ld. DR vehemently relied upon the orders of the authorities below.
In so far as the submission of the Ld. AR that the powers of the Tribunal in dealing with the appeals that the powers of the Tribunal in dealing with the appeals are expressed in the widest possible terms and it has jurisdiction to examine the question of law which arises from the facts available before lower authorities and which has a bearing on the liability of the assessee, even if such question has not been raised before the lower authorities, is concerned, he is fortified in his submission by the judgements of the Hon’ble apex court in Jute Corporation of India Limited vs. CIT 187 ITR 688 National Thermal Power Corporation Ltd. vs. CIT (1998) 229 ITR 383 (SC).
Now turning to the merits of the contention, first proviso to Section 147 reads as follows:
“Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year.”
Therefore, it is clear that after expiry of four years from the end of the relevant assessment year no action u/s 147 could be taken unless the escapement of income was due to the failure on the part of the assessee to i. make a return u/s 139 or in response to the notice issued u/s 147/148; or ii. Disclose fully and truly all material facts necessary for his assessment. 8. Facts on this aspect in this case are well borne out of record.
Assessment Year is 2007-08, it ended by 31.03.2008 and four years thereafter elapsed by 31.03.2012. Original assessment in this matter was completed on 23.12.2009, reasons for reopening were recorded on 07.11.2012 and were approved by the competent authority on 12.03.2013. Notice u/s 148 was issued on 18.03.2013 and order u/s 147 was passed on 28.03.2014. These facts clearly establish that the action was proposed to be taken u/s 147 of the Act clearly beyond four years. Further the conditions required for invoking the same, as stated above is conspicuously absent. Revenue does not claim to have come in possession of new material to form the basis for the belief that income escaped assessment.
Reliance is placed on the decisions reported in Wel Intertrade P. Ltd vs ITO (2009) 308 ITR 22 (Delhi) and Duli Chand Singhania Vs. ACIT (2004) 269 ITR 192 (P&H) for the principle that in the absence of an allegations that escapement of income had occurred by reason of failure on the part of the assessee to disclose fully and truly all the material facts necessary for his assessment, which is a “sine qua non” for assuming jurisdiction under section 147 of the Act in a case falling under the proviso thereto, any action taken by the Assessing Officer is wholly without jurisdiction.
In these circumstances, this case seems to involve a matter of change of opinion which is not permissible under law. We, therefore, hold that the invoking of jurisdiction u/s 147 of the Act by the AO is impermissible and cannot be sustained. We, therefore, quash the order dated 28.03.2014 passed by the AO as bad in law.
Since we quash the order u/s 147 of the Act, we do not propose to adjudicate the other grounds argued before us.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 19.04.2017