DY.C.I.T. 1, BHILAI(CG) vs. M/S RAVI SHREE NARAYAN TRANSPORT, BHILAI(CG)

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR

BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER

ITA No.116/Rpr/2014: Assessment Year : 2010-2011 ITA No.199/Rpr/2014: Assessment Year : 2008-2009 ITA No.200/Rpr/2014: Assessment Year : 2019-2010

DCIT -1, 32/32, Bunglows, Vs. M/s. Ravi Shree Narayan Bhilai Transport, ACC Main Gate, Jamul Square, Bhilai PAN/GIR No.AAHFR 7461 F (Appellant) .. ( Respondent)

Assessee by : Shri S.S.Rao, AR Revenue by : Shri Sanjay Kumar, DR

Date of Hearing : 12/01/ 2018 Date of Pronouncement : 15/01/ 2018

O R D E R Per Pavan Kumar Gadale, JM ITA No.116/Rpr/2014 is directed against the order of the CIT(A),

Raipur for the assessment year 2010-2011.

the separate orders both dated 19.6.2014 for the assessment year 2008-08

and 2009-2010.

revenue has raised the following grounds:

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“1. Whether in law and on facts and circumstances of the case, the CIT(A) has erred in admitting additional evidence under Rule 46A as there was no reasonable cause for the assessee not to have produced the evidence before the AO. 2. Whether in law and on facts and circumstances of the case, the CIT(A) has erred in deleting disallowance under section 40(a)(ia) of the I.T.Act of Rs.61,25,026/- out of interest and finance charges as per provisions of” 3. Whether in law and on facts and circumstances of the case, the CIT(A) has erred in deleting the addition of Rs.32,00,000/- made by the AO on account of unexplained cash credit in partners capital account u/s.68 of the I.T Act as the assessee failed to explain the source thereof. 4. Whether in law and on facts and circumstances of the case, the CIT(A) was justified in considering the submission of the assessee that the assessee paid aggregate amount of Rs.12,01,719/- against TDS deduced from payment made on account of interest and finance charges without verifying the facts available on record. 5. Whether in law and on facts and circumstances of the case, the CIT(A) was justified in restricting the disallowance of Rs.5,00,000/- to Rs.2,50,000/- out of transportation expenses considering the additions made in the case of the assessee in previous years”. 4. At the time of hearing, ld D.R. of the assessee contended that the

CIT(A) has admitted additional evidence in the form of copies of Form

No.27A, copies of challans and extract of TDS return in violation of Rule 46A.

Ld D.R. submitted that these documents were not filed before the Assessing

Officer and, therefore, the Assessing officer was not afforded an opportunity

to examine the details filed by the assessee. Therefore, he prayed for

reversing the order of the CIT(A).

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CIT(A) were available and verifiable from the department’s web site.

Therefore, it cannot be said that the assessee has filed the documents for

the first time before the CIT(A).

authorities, we find that the CIT(A) has admitted the additional evidences

without affording an opportunity to the Assessing Officer. The same should

have either been admitted under Rue 46A of the I.T. Rules, 1962 and by

having a remand report from the Assessing Officer. The same has not been

done by the Ld. CIT(A). Therefore, the order of the Ld. CIT(A), at the outset,

is against the principles of natural justice and deserves to be reversed. But

in the interest of justice, the matter is set aside to the file of the Assessing

Officer who will examine the claim of the assessee and redo the assessment

after hearing the assessee. The assessee is directed to produce all the

relevant documents, which were filed before the CIT(A) before the Assessing

officer. If after examination of the documents, the Assessing Officer is

convinced about the genuineness of the documents, then he is directed to

allow the claim of the assessee. Hence, appeal of the revenue allowed for

statistical purposes.

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ITA No.199 & 200/Rpr/2014: A.Y. 2008-09 & 2009-2010 7. In both the appeals, the revenue is aggrieved by the cancellation of

reassessment order when the AO has received information and thus formed

valid reason to belief for reopening the assessment.

completed u/s.143(3) of the Act. Subsequently, the Assessing Officer has

initiated reassessment proceedings u/s.147 of the Act after receipt of

verification report from ACIT (TDS), Raipur stating that the assessee has

made certain payments without deduction of tax, therefore, corresponding

expenses were not allowable u/s.40(a)(ia) of the Act. The assessee objected

and the objections were rejected by the Assessing Officer. The assessee

filed writ petition before the Hon’ble High Court and during pendency of the

writ petition, the reassessment proceedings were completed u/s.147 of the

Act.

assessee carried the matter before the CIT(A) stating that the reassessment

proceedings initiated by the AO solely after change of opinion and merely

because the AO did not express his mind the material placed by the

assessee at the time of original assessment, by itself, would not give a

ground to reopen the assessment on the belief that income has escaped

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assessment. The CIT(A) considering the submissions of assessee, has

quashed the reassessment proceedings observing that the assessee has filed

all the materials before the AO and the same has been considered by the AO

during the assessment proceedings. However, there is no finding by the AO

either in the original assessment proceedings or in the re-assessment

proceedings, that the assessee has not furnished the details for

consideration, rather the AO in reassessment proceedings has endorsed the

fact that the assessee has furnished the details and considered the same.

The CIT(A) following the decision of Hon’ble Supreme Court in the CIT vs.

Kelvinator (India), 228 CTR 488 and CIT vs. Usha International Ltd., 253

CTR (Del) 113 quashed the reassessment order were initiated on the basis of

change of opinion.

authorities and materials available on record. The undisputed facts of the

case are that the original assessments in the case of the assessee were

completed, determining the assessed income at Rs.25,65,160/-. Later on,

the Assessing Officer issued notice u/s.148 of the Act 28.1.2013 to make

reassessment proceedings. Reasons were also recorded and furnished to

the assessee. The reassessment proceedings were initiated on the ground

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that during the original assessment proceedings, the expenses claimed

under the head “labour charges, transportation charges and interest u/s.201

and 201(1A) were not considered. The assessee submitted that during

original assessment proceedings the assessee has furnished full and true

particulars of its income and the reassessment proceedings were initiated

possibly for correcting the mistakes of the Assessing officer. In response to

objection to reassessment order by the assessee, the Assessing Officer has

observed “ although you have furnished the details, the Assessing Officer

while passing the assessment order found to have missed to consider the

matter because there is nothing mentioned in the assessment order”. As

regards to TDS, it is observed that TDS verification was made on 23.12.2009

i.e. much before the completion of regular assessment and the Assessing

Officer in original assessment examined as is evident from para 3 of the

assessment order for assessment year 2008-09 that “some of the expenses

were covered with TDS and remaining payments were made to individual

transporters. The audit report which was relied by the Assessing Officer

during the reassessment proceedings was also available before him. Hence,

it cannot be said that the Assessing Officer has not considered the issue.

Once the Assessing Officer has made lump sum disallowance, it can safely

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concluded that all the material facts were before the Assessing officer at the

time of original assessment proceedings.

Assessing Officer has considered and examined a particular aspect, the said

aspect cannot be made a ground to reopen and initiate reassessment

proceedings. The assessing authority cannot have a fresh look and reopen

an assessment on the ground of change of opinion. The facts noted above,

clearly show that in the original assessment proceedings, the Assessing

Officer had considered and examined regarding disallowance u/s.40(a)(ia)

and TDS on financial charges. The Assessing Officer made some lumpsum

disallowance under the above heads.

decision of Hon’ble Delhi High Court in the case of CIT vs. Kelvinator of India

Ltd, 256 ITR 1(Del) , wherein, it has been held that held that an order which

has been passed purportedly without application of mind would itself confer

jurisdiction upon the Assessing Officer to reopen the proceeding without

anything further, the same would amount to giving a premium to an

authority exercising quasi-judicial function to take benefit of its own wrong.

The decision is approved by Hon’ble Supreme Court in the case reported as

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CIT vs. Kelvinator of India Ltd (320 ITR 561). in the case before us, the

Assessing Officer has initiated reassessment proceedings on the same facts

which were available before him at the time of making assessment

u/s.143(3) of the Act and no new tangible material has come on the basis of

which it could be said that he has reason to believe that income chargeable

to tax has escaped assessment on account of failure on the part of the

assessee to disclose truly and fully material of facts for the assessment.

In view of above, we are of the opinion that the reassessment proceedings

are initiated due to change of opinion and, therefore, we concur with the

findings of the CIT(A) quashing the reassessment proceedings. Accordingly,

we dismiss the ground of appeal of the revenue for both the assessment

years under consideration.

Order pronounced on 15 /01/2018.

Sd/- sd/- (N.S Saini) (Pavan Kumar Gadale) ACCOUNTANT MEMBER JUDICIALMEMBER Raipur; Dated 15 /01/2018 B.K.Parida, SPS

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Copy of the Order forwarded to : 1. The Appellant : DCIT -1, 32/32, Bunglows, Bhilai 2. The Respondent. M/s. Ravi Shree Narayan Transport, ACC Main Gate, Jamul Square, Bhilai 3. The CIT(A)- Bhilai 4. Pr.CIT- Bhilai 5. DR, ITAT, Raipur 6. Guard file. //True Copy//

BY ORDER,

SR.PRIVATE SECRETARY ITAT, Raipur