PREETHA S NAIR,KOLLAM vs. ACIT, CIRCLE-1, KOLLAM

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ITA 287/COCH/2021Status: DisposedITAT Cochin30 November 2022AY 2001-20023 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that reopening beyond 4 years without any allegation of failure by the assessee to disclose material facts is impermissible. Reviewing an order based on a subsequent decision is not allowed.

What were the facts?

The assessee's case was reopened beyond 4 years for AY 2001-02 based on a subsequent Supreme Court decision. The reopening aimed to disallow processing charges for Section 80HHC deduction, resulting in denial of the deduction.

What were the issues?

The primary issue was the validity of reopening the assessment beyond the prescribed time limit without fulfilling the conditions of the proviso to Section 147.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 80HHC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN

Before: HON’BLE SHRI SATBEER SINGH GODARA, J.M & HON’BLE SHRI MANOJ KUMAR AGGARWAL, A.M

आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2001-02 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 10-11-2021 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s.143(3) r.w.s. 147 of the Act on 02-09-2008. The assessee assails the addition on legal grounds as well as on merits.

1.

- 2 - 2. From the assessment records, it emerges that the assessee was assessed u/s 143(3) on 01.03.2004. However, the case was reopened and notice u/s 148 was issued on 17.03.2008 which is beyond 4 years from end of relevant assessment year. The case was reopened to disallow 90% of processing charges while computing deduction u/s 80HHC. Upon computation, the eligible profits were found to be loss and accordingly, deduction u/s 80HHC was denied to the assessee.

3.

During appellate proceedings, the assessee assailed reopening on the ground that the reopening was on the basis of subsequent decision of Hon’ble Supreme Court which is impermissible. The assessee also assailed the assessment on merits. However, rejecting all the pleas of the assessee, Ld. CIT(A) confirmed the action of Ld. AO against which the assessee is in further appeal before us.

4.

The undisputed position that could be culled out is that the assessee was subjected to regular scrutiny assessment proceedings u/s 143(3). However, the case was reopened beyond 4 years based on subsequent decision by Hon’ble Supreme Court. However, in terms of requirements of proviso to Sec.147, there is no allegation of failure on the part of the assessee to make true and full disclosure of all material facts which were necessary for framing the assessment. The review of order based on subsequent decision is not permissible. Therefore, we quash the reassessment proceedings. The assessee succeeds on legal ground which renders ground on merits as infructuous.

ITA No.287/Coch/2021 - 3 -

5.

The appeal stand allowed in terms of our above order.

Order pronounced on 30th November, 2022.

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