SOUTHERN ACADEMY OF MARITIME STUDIES PVT. LTD.,CHENNAI vs. DCIT, CHENNAI

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) – 15, Chennai, dated 17.03.2016 and pertains to assessment year 2006-07.

Shri G. Narayanaswamy, the Ld. representative for the assessee, submitted that the original assessment was completed under Section 143(3) of the Income-tax Act, 1961 (in short "the Act") on 12.12.2008. The Assessing Officer without any reason reopened the assessment by issuing notice under Section 148 of the Act on 31.03.2013, which is beyond the period of four years from the end of the relevant assessment year. According to the Ld. representative, there was no new material available on record nor there was any allegation of the Assessing Officer that the assessee had not disclosed particulars which were required for completing the assessment. The Assessing Officer, after reconsidering the Profit & Loss account, which is very much available on record during the course of assessment proceeding, at the initial stage, found that the administrative expenses debited to Profit & Loss account was not added back to the total income. According to the Ld. representative, in the absence of any new material, the Assessing Officer cannot reopen the assessment beyond the period of four years from the end of the relevant assessment year.

On the contrary, Shri M. Murugaboopathy, the Ld. Departmental Representative, submitted that the Assessing Officer

I have considered the rival submissions on either side and perused the relevant material available on record. Admittedly, initially the assessment was completed under Section 143(3) of the Act on 12.12.2008. Subsequently, the Assessing Officer reopened the assessment by issuing notice under Section 148 of the Act on 31.03.2013. As rightly submitted by the Ld. Representative for the assessee, there is not even a whisper in the assessment order that there was negligible on the part of the assessee in disclosing the material facts which are relevant for completing the assessment.

I have carefully gone through the provisions of Section 147 of the Act. Proviso to Section 147 of the Act clearly says that when the assessment was completed under Section 143(3) of the Act, the 4 I.T.A.No.1087/Mds/16 assessment cannot be reopened after expiry of four years from the end of the relevant assessment year provided there was negligible on the part of the assessee in furnishing the material facts that are required for completing the assessment. In the case before us, no such allegation was made. The Assessing Officer has reappreciated the Profit & Loss account available on record, which was filed by the assessee in the course of regular assessment, and found that a sum of `55,552/- escaped assessment. This Tribunal is of the considered opinion that when the assessee has furnished all the material before the Assessing Officer, it is for him to examine the same in the regular assessment. The Profit & Loss account, which was said to be the base for making addition in the reassessment proceeding, was very much available before the Assessing Officer in the original assessment itself. Therefore, as rightly submitted by the Ld. representative for the assessee, in the absence of any new material, the Assessing Officer is not justified in reopening the assessment, more particularly, after expiry of four years period from the end of the relevant assessment year. In those circumstances, the reopening of assessment after expiry of four years from the end of the relevant assessment year, is not justified in the eye of law. Accordingly, the orders of the authorities

Since the reopening is held to be bad, it may not be necessary for the Tribunal to go into the merit of the case.

In the result, the appeal filed by the assessee is allowed.