PRINCIPAL COMMISSIONER OF INCOME TAX, DELHI-8, vs. SHYAM ANTENNA ELECTRONIC LTD.

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ITA/45/2018HC DelhiDLHC01453869201717 April 2018Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE A. K. CHAWLA2 pages
AI SummaryDismissed

What did the High Court hold?

The tribunal and CIT(A) held that the Assessing Officer's action in re-assessing the returns was not justified as it amounted to an impermissible second opinion. The High Court agreed, stating that re-assessment could not be resorted to without tangible material or indication of concealment.

What were the facts?

The Revenue challenged the ITAT's order upholding the CIT(A)'s decision. The issue involved deferred revenue expenditure claimed by the assessee for four assessment years, which was originally allowed after scrutiny but later re-assessed by a different AO.

What were the issues?

Whether re-assessment is permissible when the original assessment was completed after scrutiny and there is no new material or indication of concealment, essentially questioning the validity of a second opinion by the AO.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

$~10-13 * IN THE HIGH COURT OF DELHI AT NEW DELHI

ITA 44/2018 & CM APPL. 1624/2018

ITA 45/2018 & CM APPL. 1625/2018

ITA 46/2018 & CM APPL. 1626/2018

ITA 47/2018 & CM APPL. 1627/2018

PRINCIPAL COMMISSIONER OF INCOME TAX, DELHI-8 ..... Appellant Through: Mr. Zoheb Hossain, Sr. Standing Counsel with Mr. Deepak Anand, Jr. Standing Counsel.

versus

SHYAM ANTENNA ELECTRONIC LTD. ..... Respondent

Through: Mr. Rohit Jain, Adv.

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA

O R D E R %

17.04.2018

The Income Tax Appellate Tribunal’s (ITAT) order upholding the CIT(A)’s decision has been challenged by the Revenue. Both the Revenue Appellate Authorities held that the Assessing Officer’s action in re-assessing the returns of the present assessee were not justified as they amounted to an impermissible second opinion.

The issue involved that culminated in the impugned order was the deferred revenue expenditure claimed by the assessee for four assessment years between 2003-04 to 2006-07. It is not disputed that

these assessments were completed after scrutiny and due enquiry. Nevertheless, the later AO was of the opinion that the deferred expenditure could not have been allowed in the manner originally under Section 143(3) of the Income Tax Act. This Court notices that the ITAT relied upon the seminal ruling of the Supreme Court in Commissioner of Income Tax vs. Kelvinator, (2010) 320 ITR 561 and the subsequent holdings to rule that in the absence of tangible material outside the assessment records or positive indication that the assessee had concealed the material particulars when it filed its returns, re-assessment could not be resorted to. That formulation squarely applies to the facts of this case because the assessee’s original return was subjected to scrutiny; the AO had discussed the relevant issue and recorded its reasons. There was no material stringent on record to justify re-assessment.

For the above reasons, the Court is of the opinion that no substantial question of law arises in these appeals; they are accordingly dismissed.

S. RAVINDRA BHAT, J

A. K. CHAWLA, J APRIL 17, 2018 rc

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