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Income Tax Appellate Tribunal, KOLKATA BENCH ‘SMC’, KOLKATA
Before: Dr. Manish Borad & Shri Sonjoy Sarma]
ORDER
Per Sonjoy Sarma, JM:
This appeal of the assessee for the assessment year 2009-10 is directed against the order dated 07.09.2023 passed by the ld. Commissioner of Income-tax, Appeals, NFAC, Delhi [hereinafter referred to as ‘the ‘ld. CIT(A)’].
At the outset, we find that there is a delay of 9 days in filing of the appeal by the assessee. We after perusing the petition for condonation are convinced that the assessee was prevented by sufficient cause from filing the appeal in time and hence delay is condoned and appeal is admitted.
At the outset, ld. counsel for the assessee submitted that reopening in the case of assessee was bad in law. He has submitted that assessment order involved in this case is A.Y.
LGW Limited 2010-11 and the reasons of the reopening of the assessment were recorded on 30.03.2016. He has further submitted that the original assessment in this case was carried out u/s 143(3) of the Act. He therefore has submitted that Proviso to section 147 of the Act is attracted in this case which provides that where original assessment has been carried out u/s 143(3) of the Act, no action shall be taken u/s 147 of the Act after the expiry of four years from the end of the relevant assessment year unless the income chargeable to tax has escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for that assessment year. He has submitted that the assessee has fully disclosed all the material facts relating to the transactions carried out by the assessee. He has invited our attention to the reasons recorded by the assessing officer. That there is no mention in the said reasons recorded that there is any failure on the part of the assessee to fully disclose the material facts necessary for the assessment. He has further submitted that it has been mentioned in the reasons recorded that the assessee has entered into fictitious transactions of Rs. 34,90,364/- with M/s. Pratap Enterprises. The allegation of the AO is that the proprietor of M/s. Pratap Enterprises namely Shri Varinder Kumar was not found out through enquiries by the DIT (Inv.) Wing, Gurgaon and reason to believe that the income of the assessee has escaped assessment. The contention of the AR is that assessee purchased goods from alleged party and payments for such purchases were made
LGW Limited through banking channel which are undisputed fact and non- traceable of the alleged party by DIT (Inv.) could not be ground to suspect that the transaction was bogus. He therefore prayed that on suspicion no assessment could be reopened u/s 147/148 of the Act. The ld. AR relied on the judgement rendered by Hon’ble Supreme Court in the case of (a) Chhugamal Rajpal vs S.P. Chaliha (1971) 79 ITR 603 (SC) (b) Sheo Nath Singh vs ACIT (1971) 82 ITR 147 (SC) wherein similar view was taken.
On the other ld. DR could not rebut the aforesaid factual contentions raised by the assessee.
We find force in the contention raised by the ld. counsel for the assessee. We find that the assessing officer has reopened the assessment merely based on the information received from Investigation Wing without verifying the veracity and truthfulness of such information. The information was wrong and the reopening of the assessment on the basis of borrowed satisfaction without correlating with the facts of the case. Even there is no allegation that the income of the assessee has escaped assessment due to non-disclosure of the facts necessary for the assessment and since the assessment has been reopened after four years of the end of relevant assessment year, hence the exception provided under 1st Proviso to section 147 is attracted. In view of this, the reopening of the assessment is held as bad in LGW Limited law. Accordingly, we set aside the impugned order passed by the authorities below.
In the result, the appeal of the assessee is stands allowed.