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Income Tax Appellate Tribunal, C / SMC BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN
आदेश /O R D E R
This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) -15, Chennai, dated 16.12.2016 and pertains to assessment year 2007-08.
There was a delay of 4 days in filing this appeal by the Revenue. The Revenue has filed a petition for condonation of delay. We have heard the Ld. D.R. and the Ld.counsel for the assessee. We find that there was sufficient cause for not filing the appeal before the stipulated time. Therefore, we condone the delay and admit the appeal.
The only issue arises for consideration is addition of `4,90,018/- being the interest on the borrowed loan from Karnataka Bank.
Shri B. Sahadevan, the Ld. Departmental Representative, submitted that this is a second round of litigation. In the first round, the Assessing Officer made addition of `6,65,437/-. The addition made by the Assessing Officer was confirmed by the CIT(Appeals). However, on further appeal before this Tribunal, the addition of `6,65,437/- was deleted by this Tribunal. Subsequently, according to the Ld. D.R., on going through the records, the Assessing Officer found that the assessee borrowed loan from Karnataka Bank and utilised the same in making investment in mutual funds and farm house and the assessee paid interest of `4,90,018/-, Since the interest was paid on the borrowed funds, which was used for making investment in mutual funds and agricultural activities, according to the Ld. D.R., the Assessing Officer disallowed the interest. Moreover, referring to ground No.2.6 raised before this Tribunal, the Ld. D.R. submitted that there was a revenue audit objection, hence, the appeal is filed before this Tribunal. On a query from the Bench, whether the audit objection was brought to the notice of the Commissioner who authorized filing of appeal before this Tribunal, the Ld. D.R. submitted that it is not known from the records.
On the contrary, Sh. Saroj Kumar Parida, the Ld.counsel for the assessee, submitted that the assessment was reopened after expiry of four years from the end of the relevant assessment year.
According to the Ld. counsel, the assessee has furnished all the required particulars for completing the assessment, including the interest paid on the borrowed funds from Karnataka Bank, therefore, there is no negligence on the part of the assessee. Since the original assessment was completed under Section 143(3) of the Income-tax Act, 1961 (in short 'the Act'), the Assessing Officer cannot reopen the assessment after expiry of four years from the end of the relevant assessment year unless there was negligence on the part of the assessee in furnishing the particulars required for completing the assessment. In this case, according to the Ld. counsel, it is nobody’s case that the assessee failed to furnish any of the particulars. The Assessing Officer reopened the assessment after going through the material already filed at the time of original assessment. Therefore, according to the Ld. counsel, the CIT(Appeals) found that the reopening of assessment is bad in law.
I have considered the rival submissions on either side and perused the relevant material available on record. It is not in dispute that the original assessment was completed under Section 143(3) of the Act and it travelled upto this Tribunal. After expiry of four years from the end of the relevant assessment year, the Assessing Officer reopened the assessment by issuing notice under Section 148 of the Act. Prima facie, it appears that the assessment was reopened on the basis of audit objection. The fact remains that the assessee filed all the particulars, including details of payment of interest on the funds borrowed from Karnataka Bank. The Assessing Officer, after examining the material already available on record, found that the interest paid on the loan borrowed from Karnataka Bank escaped assessment.
7. It is not the case of the Revenue that the assessee has failed to furnish any of the particulars required for completing the assessment. In the absence of any allegation that the assessee has failed to furnish any particulars required for completing the assessment, this Tribunal is of the considered opinion that the reopening of assessment after expiry of four years is not justified. Moreover, admittedly, the assessee has furnished all the required particulars and the Assessing Officer after going through the records once again, found that the assessee has paid interest of `4,90,018/-. In the absence of any new material, this Tribunal is of the considered opinion that the reopening of assessment after expiry of four years from the end of the relevant assessment year is not justified. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
In the result, the appeal filed by the Revenue is dismissed.