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

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC-I : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA No.181/Del/2016 Assessment Year : 2006-07 Sushil Kumar Jain, Vs. ACIT, C-67, Neeti Bagh, Circle-37(1), August Kranti Marg, New Delhi. New Delhi. PAN: AAIPJ6676M (Appellant) (Respondent) Assessee By : Shri Gautam Jain, Advocate Department By : Shri Deepak Garg, Sr. DR

Date of Hearing : 23.06.2016 Date of Pronouncement : 24.06.2016

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.

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gains. Return declaring total income of Rs.8,39,253/- was filed on

31.10.2006, which was processed u/s 143(1) of the Income-tax Act,

1961 (hereinafter also called `the Act’). Assessment order u/s 143(3) of

the Act was passed on 26.3.2008 determining total income at

Rs.8,56,753/-. The AO reopened the assessment by noticing that the

assessee claimed credit for TDS against the current year’s income on

receipts of Rs.4,47,600/-, which were not offered for taxation.

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.

material available on record. Page 30 of the paper book is a copy of

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letter dated 29.10.2013 issued by the AO to the assessee intimating the

reasons for reopening of assessment, which are as under:-

“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. 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 18500/- Total 4,47,600/-

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.”

23.2.2011, a copy of which is available at page 25 of the paper book,

indicating the mistake in the assessment order, which reads as under:-

“The CAG audit noticed that as per TDS certificates and bifurcation of the total professional receipts filed during the course of assessment

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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/-

for reopening of assessment, it turns out that the subject matter of both

the notices is similar, namely, receipts of Rs.4,47,600/-, which in the

opinion of the AO escaped taxation. Proceedings u/s 154 were initiated

by means of notice dated 23.2.2011. The assessee furnished reply to this

notice, a copy of which has been placed on page 27 of the paper book.

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

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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.

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rectification proceedings u/s 154 were initiated in the year 2011 and

these were still on in the year 2013, when the proceedings u/s 147 were

initiated on the same subject matter. This manifests that the proceedings

u/s 147 cannot stand during the continuation of proceedings u/s 154. Ex

consequenti, the initiation of re-assessment by means of notice u/s 148

and the proceedings flowing therefrom are hereby set aside. The AO is

fully empowered to give a logical conclusion to the proceedings u/s 154

as per law.

proceedings, there is no need to dispose of the grounds taken on merits.

The order pronounced in the open court on 24.06.2016. Sd/-

[R.S. SYAL] ACCOUNTANT MEMBER Dated, 24th June, 2016. dk

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