SUSHIL KUMAR JAIN,NEW DELHI vs. ACIT, NEW DELHI

ORDER This appeal by the assessee is directed against the order passed by the CIT(A) on 27.10.2015 in relation to the assessment year 2006-07.

Assessment was completed u/s 147/143(3), making total addition of Rs.2,37,500/-. The assessee, inter alia, argued before the ld. CIT(A) that the AO had issued notice u/s 154 and hence the initiation of re- assessment proceedings by means of notice u/s 148 was not valid. The ld. CIT(A) remained unconvinced with the assessee’s submission and upheld the initiation of re-assessment proceedings and the additions made. The assessee, through this ground/issue, is aggrieved against the initiation of reassessment proceedings.

“The assessment u/s 143(3) of the Income Tax Act, 1961 was completed on 26.03.2008 at an income of Rs.8,65,753/-. On further examination of records reveals that the assessee had received professional/technical charges amounting to Rs.4,47,600/- from various parties which have not been credited to Profit & Loss account by the assessee for the financial year 2005-06 relevant to assessment year 2006-07. The details of the receipts are given as under: S.No. Name of the party Total professional/ technical fees received as per TDS certificates.

The assessee neither at the time of filing return of income nor at any time of assessment proceeding have furnished the above information and thus failed to disclose fully & truly all material facts.”

“The CAG audit noticed that as per TDS certificates and bifurcation of the total professional receipts filed during the course of assessment proceedings the following receipts received from the following parties were not found to have been included in the total receipts which have credited to the P&L account. S.No. Name of the party Total professional receipts received as per TDS certificate (in Rs.). 1. Bhilwara Chittorgarh Duss Ltd. 45,100/- 2. Murgan Securities Credits 95,000/- 3. Goyal M.G. Gases (P) Ltd. 2,49,000/- 4. Khaitan Chemicals & Fertilizer 40,000/- 5. Bharat Hydropower Corporation 18,500/- Total 4,47,600/-

As against these proceedings u/s 154, taking place in the year 2011, the AO initiated the instant re-assessment proceedings in the year 2013.

The ld. DR was required to intimate the status of section 154 proceedings on the earlier date of hearing and the case was accordingly adjourned. Today, the ld. DR submitted in the open court that he enquired from the concerned AO about the status of section 154 proceedings initiated in the year 2011, who, in turn, stated that neither any order has been passed u/s 154 nor such proceedings have been dropped. This shows that the AO initially initiated rectification proceedings in the year 2011 and without completing the same, started re-assessment proceedings in 2013 and, thereafter, completed the assessment by means of order u/s 143(3) read with section 147. This manifests that during the continuation of the proceedings u/s 154, the AO embarked upon the same issue by means of a separate re-assessment proceedings without concluding the earlier proceedings initiated u/s 154.

It goes without saying that initiation of two parallel proceedings on a similar subject matter, cannot sustain. If first proceedings have been validly initiated, then such proceedings must come to an end for making a way for the initiation of another proceedings on the same subject matter. Unless the earlier proceedings are buried, either by way of an order on merits or by dropping the same, no fresh subsequent proceedings on the same subject matter can be initiated.