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Income Tax Appellate Tribunal, DELHI BENCHES : SMC-3 : NEW DELHI
Before: SHRI J. SUDHAKAR REDDY
ORDER This appeal filed by the assessee is directed against the order of the CIT(A) dated 27.02.2015 for the assessment year 2005-06.
After hearing the rival contentions, I find that the assessee has originally filed its return of income on 28.10.2005. The assessment was completed u/s 143(3) on 4.10.2007. Notice for reopening of assessment u/s 148, after recording reasons for reopening was issued on 28.3.2012, which is admittedly beyond a period of four years from the end of the assessment year. The reasons recorded for reopening are at page 16 of the paper book which is extracted below:-
“Reasons for issue of notice u/s 148 in the case of M/s J.B. Trading Co., A-72, Chander Nagar, Ghaziabad. A.Y. 2005-06 (PAN AAFPG5955F) The assessee enjoys income from business of trading of zippers. Return for the AY 2005-06 declaring total income of Rs.13,420/- was filed on 28.10.2005. Assessment in this case was completed u/s 143(3) on returned income on 04.10.2007. It is noticed that the assessee has declared commission receipt of Rs.1,18,427/- in its Profit & Loss account whereas as per TDS certificate enclosed with the return, the assessee is in receipt of commission of Rs.7,90,367/-. Further, the assessee has claimed the credit of tax deducted on the said commission of Rs.7,90,367/-. Accordingly, commission of Rs.6,71,940/- (Rs.7,90,637-1,18,427) was not shown in the profit & loss account which was to be added back to the income of the assessee. I have, therefore, reason to believe that the income of the assessee to the extent of Rs.6,71,940/- has escaped assessment within the meaning of provisions to section 147 of the IT Act, 1961. In order to assess the escaped income, proceeding u/s 147 of the IT Act, 1961 are being initiated.”
One more fact that is recorded by the ld.CIT(A) on page 3, para 2 is as follows:-
“This notice u/s 148 was received unserved with remark of the postal authority “left return”. Envelope containing notice received unserved on 31.03.2012 is available on record of the assessing officer.” 4. On these facts, we have necessarily hold that the reopening is bad in law for the reason that in the reasons recorded there is no allegation that the assessee has failed to disclose fully and truly facts required for the assessment. Hence, in terms of first proviso to section 147, the reopening is bad in law in view of the decision of the jurisdictional High Court in the case of Harvana Acrylic Manufacturing Co. vs. CIT & Anr.
308 ITR 38 (Del). Other decisions that support this view are Wel Intertrade Pvt. Ltd. vs. ITO 308 ITR 22 (Del) and JSRS Udyog Limited and Another vs. ITO, 313 ITR 321 (Del). Respectfully following the decisions of the jurisdictional High Court, we have to hold that the reopening is bad in law as the AO has not alleged that the assessee has failed to disclose truly and fully facts required for the assessment as per the first proviso to Section 147. Even otherwise also notice u/s 148 for reopening has not been served on the assessee. On this ground also, the assessment has to be quashed.
In the result, the appeal of the assessee is allowed.
The order pronounced in the open court on 30.08.2016.