SRENIK SINGHVI,KOLKATA vs. ACIT, CIRCLE - 54, KOLKATA, KOLKATA

At the outset, it is noted that there is a delay of 34 days on the part of the assessee in filing these appeals before the Tribunal. In this regard, an application is filed by the assessee seeking condonation of the delay

First we take up the appeal of the assessee for A.Y. 1998-99 being ITA No. 1203/KOL/2011.

Grounds No. 1 & 2 of this appeal involve a preliminary issue relating to the validity of assessment made by the Assessing Officer under section 143(3) read with section 147 of the Act.

The assessee in the present case is an individual, who is engaged in the legal profession. The return of income for the year under consideration, i.e. A.Y. 1998-99 was filed by him on 16.10.1998 declaring total income of Rs.6,80,660/-. In the assessment originally completed under section 143(3) vide an order dated 26.03.2001, the total income of the assessee was determined by the Assessing Officer at Rs.7,12,400/-. The said assessment was subsequently reopened by the Assessing Officer after recording the reasons and in the assessment completed under section 143(3) read with section 147, addition of Rs.5,52,954/- was made by the Assessing Officer to the total income of the assessee on account of professional receipts allegedly suppressed by the assessee.

Against the order passed by the Assessing Officer under section 143(3) read with section 147, an appeal was preferred by the assessee before the ld. CIT(Appeals) challenging the validity of the said assessment as well as disputing the addition made by the Assessing Officer therein on account of professional receipts allegedly suppressed. After considering the submissions made by the assessee as well as the material available on record, the ld. CIT(Appeals) did not find merit in the preliminary issue raised by the assessee challenging the validity of

As regards the preliminary issue raised in Grounds No. 1 & 2 relating to the validity of the assessment made by the Assessing Officer under section 143(3) read with section 147, ld. Counsel for the assessee raised two-fold contentions. Firstly, he contended that the reasons given by the Assessing Officer for reopening of the assessment being the excess credit of tax given to the assessee cannot be regarded as the case of escapement of income and, therefore, the reopening itself was bad in law. Secondly, he contended that the original assessment for the year under consideration was completed by the Assessing Officer under section 143(3) after verifying all the relevant records including the books of account of the assessee as well the TDS certificates filed along with the return and in the absence of any new information or material coming to the possession of the Assessing Officer, the reopening of assessment on the basis of the same record was based on a mere change of opinion, which is not permissible in law. In support of this contention, he relied on the decision of the Hon’ble Supreme Court in the case of Kelvinator India Limited reported in 320 ITR 561 as well as the decision of the Hon’ble Calcutta High Court in the case of Man Mohan Kedia –vs.- ITO reported in 344 ITR 187 (Cal.).

Ld. D.R., on the other hand, strongly relied on the impugned order of the ld. CIT(Appeals) in support of the revenue’s case on this issue and

We have considered the rival submissions and also perused the relevant material available on record. In order to appreciate the contention of the ld. Counsel for the assessee on the preliminary issue raised in this appeal challenging the validity of reopening of assessment, it is relevant to refer to the reasons recorded by the Assessing Officer for reopening, which are extracted below:-

As regards the other contention raised by the ld. Counsel for the asseessee that the reopening is based on a mere change of opinion, it is

As regards the remaining three appeals of the assessee for A.Ys. 2000-01, 2001-02 and 2002-03, it is observed that the common issue involved in Grounds No. 1 & 2 thereof challenging the validity of the reopening of assessment is similar to the one raised by the assessee in A.Y. 1998-99 except that there was no assessment under section 143(3) for any of these three years and the returns filed by the assessee were processed under section 143(1). The contention raised by the ld. Counsel for the assessee in A.Y. 1998-99 and accepted by us that the reopening was based on a mere change of opinion, thus is not applicable in all these three years.

As regards the other contention raised by the ld. Counsel for the assessee that the excess credit for tax allowed to the assessee cannot be regarded as escapement of income for validly reopening assessment, we have already held, while disposing of the appeal of the assessee for assessment year 1998-99, on perusal of the reasons recorded by the Assessing Officer, which are identical for all the four years under consideration, that the assessments were not reopened by the Assessing Officer for excess credit of tax allowed to the assessee, but the same having been reopened for the reason that the professional receipts were not fully disclosed by the assessee, there was a case of escapement of income which justified the reopening of assessment by the Assessing Officer. We, therefore, find no merit in the preliminary issue raised by the assessee in his appeals for A.Ys. 2000-01, 2001-02 & 2002-03 and dismiss the relevant Grounds No. 1 & 2 of the appeals of the assessee for the said years.

As regards the common issue involved in Ground No. 3 of the appeals of the assessee for A.Ys. 2000-01, 2001-02 & 2002-03 relating to the assessee’s claim for credit on account of tax deducted at source, ld. Counsel for the assessee has sought a limited relief by contending that the corresponding professional income having been offered by the assessee in the relevant years, when the services were actually rendered and the same having reached its finality as a result of the decision rendered by the ld. CIT(Appeals) vide his impugned order, the credit for tax deducted at source from the said income should be granted in the said years. After having considered the submissions of both the sides, we are of the view that this limited relief sought by the ld. Counsel for the assessee is in accordance with the relevant provisions of the law and the same, therefore, has to be allowed. Accordingly, we direct the Assessing Officer to verify the amount of TDS relating to the income from legal profession finally assessed in the hands of the assessee for the years under consideration, i.e. A.Ys. 2000-01, 2001-02 & 2002-03 and grant credit to the assessee for the said years after due verification. Ground No.

In the result, the appeal of the assessee for assessment year 1998-99 is allowed, while the appeals of the assessee for A.Ys. 2000- 01, 2001-02 & 2002-03 are partly allowed.