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Income Tax Appellate Tribunal, BENCH ‘A’ KOLKATA
Before: Hon’ble Shri S.S. Godara, JM & Shri M.Balaganesh, AM ]
IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH ‘A’ KOLKATA [Before Hon’ble Shri S.S. Godara, JM & Shri M.Balaganesh, AM ] ITA No.1772/Kol/2016 Assessment Year : 2006-07 I.T.O., Ward-13(1) -versus- M/s Calcutta Ahmedabad Kolkata Carriers Pvt. Ltd. Kolkata (PAN:AACCC 2260 P) (Appellant) (Respondent) For the Appellant: Shri Sallong Yaden, Addl CIT For the Respondent: Shri Anil Kochar, Advocate
Date of Hearing : 02.05.2018. Date of Pronouncement : 09.05.2018.
ORDER PER S.S. GODARA, JM:
This Revenue’s appeal for A.Y.2006-07 arises from the CIT(A)-5, Kolkata’s order dated 18.07.2016, passed in Appeal No. 93/CIT(A)-5/W-3(3)/13-14/14-15, quashing the reopening in question, in proceedings u/s 147/148 of the Income Tax Act, 1961 (hereinafter the Act).
We notice, at the outset that the CIT(A)’s detailed discussion on the above legal issue while quashing the impugned reopening reads as follows :-
“2. The notice u/s.148 was issued on 28.02.2012. The relevant assessment year is 2006-07. The case was first scrutinized u/s.143(3) of the I.T. Act vide the order dated 29.12.2008. Thus it is a case of re-assessment after the earlier assessment was made u/s.143(3). In terms of the proviso to section 147 initiation of re- assessment proceeding after the expiry of four years from the end of the relevant assessment year can be resorted to only in cases where income escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment for that assessment year. There is no finding in the relevant notice or notices and in the assessment order u/s.147/ 143(3) dated 28.03.2013 ta~t the appellant failed to disclose fully and truly all material facts. The A.O. has mainly drawn inferences from Form 3CD and e-TDS returns which have been filed by the appellant itself. Though the inferences have been challenged by the appellant it becomes apparent that no third party information was in possession of the A.O. who initiated the ITA No.1772/Kol/2016 M/s Calcutta Ahmedabad Couriers Pvt. Ltd. A.Y.2006-07
re-assessment proceeding u/s.147. Form 3CD and e-TDS returns are filed by the appellant itself. These documents were available before the A.O. when the earlier assessment u/s.143(3) was passed vide the order dated 29.12.2008. On the earlier occasion the A.O. did not point out any deficiency on account of the issues picked up in the present re-assessment proceeding.
2.1. From the assessment folder, it is seen that the appellant filed a bunch of copies of various· pages of Form 26Q for various Quarters of the. Financial Year 2005-06 relevant for the current assessment year. The said pages running into tens of pages show deductee details of various payments with other corresponding details such as dates, TDS, date or deduction and so on. Along with the said Form 26Q· pages are details of truck hire charges, in which break up of lorry hire charges is shown branch wise, quarter-wise and according to TDS deducted and not deducted. The said details appearing on one page and flagged as "details of truck hire charge" in the bottom of the page shows lorry hire charges with reference to TDS deducted and not deducted as under :-
Total TDS deductable amount Lorry /hire charges - 1 31,156,729/- Lorry /hire charges - 2 12,798,860/- 43,955,589/- Tax deducted 26,399,838/- No TDS deducted 17,555,751/-
Further details on the same page presented branch wise confirm the lorry hire charges as aggregated above of Rs.4,39,55,589/ - against two heads numbered as lorry hire charges-I and lorry hire charges-2 forming part of the total shown on the last column aggregated to, along with other items, Rs.5,27,64,671/-, which is the figure shown in the P&L A/c under truck hire charges in schedule-LO annexed to Audited P&L A/c. The said schedule clearly shows Rs.5,27,64,671/- forming part of the total direct expenses as debited to the P&L A/c. of Rs.7,95,35,668/-. Thus it becomes clear that the truck hire charges/lorry hire charges including ones on which TDS has been effected as per the copies of form 26Q for the current Financial Year for various Quarters have been incorporated in the P&L A/c. From the original assessment order, pages 1 & 2, it is apparent that the A.O. has examined the lorry hire charges in general and also with reference to the payees listed u/s.40A(2)(b). On the said point the A.O. had made some additions also as is clear from page-2 of the original assessment order. Thus the lorry hire charges were examined by the then A.O. in the course of original assessment proceeding and the, appellant filed relevant details in the form of various pages of 26Q and some other details along with Schedule-10 of the P&L A/ c.
ITA No.1772/Kol/2016 M/s Calcutta Ahmedabad Couriers Pvt. Ltd. A.Y.2006-07
2.2. As regards the A,O.'s decision that the appellant incurred expenses of Rs.77,51,915/- and failed to offer the explanation for the source of the said expenditure, the relevant facts appearing in the assessment order and folder do not support the A.O.'s action. The A.O.'s allegation on page-4 of the assessment order that the appellant did not account for the said expenditure of Rs. 77,51,915/ - is not based on materials, details or documents appearing in the assessment folder as briefly described above. Comparison with the annexure to Form 3CD cannot be mechanically resorted to in view of other more primary facts available in the assessment folder. The table appearing on page-4 and page-l of the assessment order which apparently has been made the basis for addition by the A.O. draws conclusion on wrong data. The facts in the assessment folder clearly indicate that Rs.1.37,23,353/- appearing in the last column of the two tables in the assessment order was accounted for in the books of accounts, Form 26Q and the P&L A/c. The figures listed against annexure to forms 3CD in the penultimate row of the said tables are wrong, which are not in sine with other relevant details and primary facts in the assessment folder. These wrong figures, in view of other material facts suggesting otherwise, cannot be the basis for concluding that these was unexplained expenditure in the case of the appellant. The lorry hire charges against the indicated three deductees /payees in no case can be termed as unexplained expenditure as this have been culled out from the Form 26Q transactions furnished by the appellant and which form part of the P&L A/ c. and its annexure.
2.3. It appears to be a case of change of opinion on existing materials. In any case the A.O. has not demonstrated that there was failure on the part of the appellant to disclose fully and truly all material facts necessary for the assessment. Thus the said condition precedent for initiating the income escaping assessment u/s.147 as laid down in the proviso to section 147 has not been met in regard to the said figure of Rs.77,51,915. Thus the A.O. gets no jurisdiction to initiate the proceeding u/s 14 7/148 in relation to Rs. 77,51,915/-.”
We have heard rival contentions. Case file perused. Learned Departmental Representative quotes hon’ble apex court’s decision in CIT vs PVS Beedies [1999] 237 ITR 13 (SC) that the Revenue’s audit party is very much entitled to point out factual error or omission made in framing of a regular assessment. The revenue’s case is that the Assessing Officer had rightly taken recourse to the impugned reopening in view of the fact that assessee’s taxable income liable to be assessed had escaped assessment. We find no substance in the Revenue’s instant arguments. There is no dispute that the Assessing Officer initiated the impugned reopening beyond four
ITA No.1772/Kol/2016 M/s Calcutta Ahmedabad Couriers Pvt. Ltd. A.Y.2006-07
years from the end of the impugned assessment year. There is no material in the instant file which could indicate that the impugned reopening has been initiated on account of assessee’s failure in furnishing fully and truly all the relevant particulars during the course of assessment as per first proviso to section 147 of the Act. Hon’ble apex court’s decision in 1997 106 ITR 1 (SC) Parashuram Pottery Works Co. Ltd. Vs ITO holds in similar circumstances that an assessee is not to be held responsible for the Assessing Officers’ remissness in not applying the statutory provision correctly. Hon’ble Gujarat high court’s decisions in [2013] 359 ITR 447 in case Kanak Fabrics Ltd vs ITO [2014] 360 ITR 496 (Guj) Gujarat Lease Financing Ltd. Vs DCIT also quash similar re-openings initiated beyond four years without uttering a single word on assessee’s failure as stipulated in first proviso to section 147. Learned counsel representing assessee files before us a copy of the regular assessment order dated 29.12.2008 as well. He pleads that the Assessing Officer had very well examined all the relevant issues while framing the said regular assessment. He further takes us to reassessment framed in question finalised on 28.02.2013 making it evident that the Assessing Officer had initiated reopening in question on the basis of records already filed by the assessee only. We take into account all these facts and legal position to conclude that the CIT(A) has rightly quashed the reopening proceedings beyond four years from the end of the impugned assessment year. The Revenue’s sole substantive ground is rejected. This Revenue’s appeal is dismissed.
Order pronounced in the open Court on 09.05.2018.
Sd/- Sd/- [M.Balaganesh] [ S.S. Godara ] Accountant Member Judicial Member Dated : 09.05.2018. [RG Sr.PS]
ITA No.1772/Kol/2016 M/s Calcutta Ahmedabad Couriers Pvt. Ltd. A.Y.2006-07
Copy of the order forwarded to: 1.M/s Calcutta Ahmedabad Carriers Pvt. Ltd., 7, Tarachand Dutta Street, Kolkata- 700073. 2. I.T.O. Ward-13 (1), Kolkata. 3. CIT(A)-5, Kolkata 4. C.I.T.-5, Kolkata. 5. CIT(DR), Kolkata Benches, Kolkata. True Copy By order,
Senior Private Secretary Head of Office/D.D.O., ITAT, Kolkata Benches
ITA No.1772/Kol/2016 M/s Calcutta Ahmedabad Couriers Pvt. Ltd. A.Y.2006-07