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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI RAVISH SOOD & SHRI ARUN KHODPIA
आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the CIT(Appeals), Bilaspur dated 02.03.2016, which in turn arises from the order passed by the A.O under Sec.147 r.w.s. 143(3) of the Income Tax Act, 1961 (for short ‘the Act’) dated 13.09.2013 for assessment year 2007-08. Before us the assessee has assailed the impugned order on the following grounds of appeal: “1. That on the facts and circumstances of the case, the learned CIT(Appeals), Bilaspur is erred in confirming the addition of Rs.7,44,681/- made by the learned A.O without considering the facts and circumstances of the assessee. 2. That on the facts and in the circumstances of the case, the learned Assessing Officer has erred in passing the order u/s.147 read with sec.143(3), without disposing the objection raised by the assessee against the issuance of the notice u/s.148. 3. That the learned A.O passed the order without giving property opportunity of being heard the assessee, without giving the time to refer the matter before the learned JCIT u/s.144A. 4. That it was explained to the learned AO that the details of each and every payment had been explained at the time of original assessment proceedings and the A.O was satisfied with the fact of the case then only he consider the case and passed the assessment order u/s.143(3) with the addition to this head a lumsum amount Rs.40,000/- to cover the revenue leakage. 5. That the appellant reserve the right to add, omit, or amend any ground after the copies of relevant documents prayed for are supplied by the CIT(Appeals).”
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Succinctly stated, original assessment in the case of the assessee was framed by the A.O vide his order passed u/s. 143(3), dated 25.06.2008, determining the total income of the assessee at Rs.8,26,983/-. Subsequently, the case of the assesee was reopened by the A.O, for the reason that assessee’s claim for deduction of transportation charges of Rs.7,44,681/- was allowed by the AO while framing the original assessment, despite the fact that the same were paid by the assessee without deducting tax at source u/s.194C of the Act. Notice u/s.148 of the Act was issued to the assessee on 13.09.2012. In compliance, it was submitted by the assessee that his original return of income filed u/s. 139(1) of the Act dated 31.07.2017 be treated as the return filed in compliance to the aforesaid notice.
During the course of assessment proceedings, it was observed by the A.O that as the assessee had failed to deduct tax at source on the transportation charges of Rs.7,44,681/- as was required u/s.194C of the Act, therefore, the same were liable to be disallowed u/s.40(a)(ia) of the Act. Accordingly, the A.O on the basis of his aforesaid deliberations vide his order passed u/s.147 r.w.s.143(3), dated 13.09.2013 after disallowing the amount of transportation charges determined the income of the assessee at Rs.15,71,660/-.
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Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without any success.
The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us.
We have heard the ld. authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions.
Admittedly, it is a matter of fact borne from record that the assessment in the case of the assessee was originally framed vide order passed by the AO u/s.143(3) of the Act, dated 25.06.2008, determining the income of the assessee at Rs.8,26,983/-. Ostensibly, as the assessee had failed to deduct tax at source on the transportation charges of Rs.7,44,681/- (supra), as was required u/s.194C of the Act, the A.O, thus, on the said count had reopened his case vide notice issued u/s.148 of the Act, dated 13.09.2012. The “reasons to believe” on the basis of which the concluded assessment of the assessee was reopened reads as under:
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Considering the fact that the case of the assessee was originally assessed by the A.O vide order passed u/s.143(3) of the Act, dated 25.06.2008, the Ld. Authorized Representative (for short ‘AR’) for the assessee had, inter alia, assailed the validity of the jurisdiction that was assumed by the A.O for reopening the concluded assessment of the assessee after four years from the end of the relevant A.Y.2007-08. It was submitted by the ld. AR that as the assessee had not defaulted as regards either of the two conditions contemplated in the “1st proviso” to Sec. 147 of the Act which would have otherwise validated the reopening of its concluded assessment beyond a period of four years from the end of the relevant assessment year , viz. (i). failure to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148; or (ii). failure to disclose fully and truly all material facts necessary for its assessment for the year under consideration, therefore, the notice issued u/s 148, dated 13.09.2012 i.e beyond a period of four years from the end of the relevant assessment year i.e AY 2007-08 not being as per the mandate of the “1st proviso” to section 147 of the Act was liable to be quashed.
Admittedly, it is a matter of fact borne from record that the case of the assessee for the year under consideration i.e AY 2007-08 which was originally assessed u/s.143(3) of the Act, had thereafter been reopened on
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13.09.2012 i.e. beyond the period of four years from the end of the relevant assessment year, as the same had expired on 31.03.2012. As stated by the Ld. AR, and rightly so, in a case where the original assessment had earlier been framed in the case of the assessee under sub-section (3) of Sec. 143, ,then the same cannot be reopened u/s.147 of the Act beyond a period of four years from the end of the relevant assessment year, except for wher the income of the assessee chargeable to tax had escaped assessment for certain circumstances carved out in the said proviso, viz. (i) failure of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148; or (ii) failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year.
It is not the case of the department that the there had been any failure on the part of the assessee to file his return of income under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148. In so far the second limb contemplated in the “1st proviso” to Section 147 of the Act is concerned, i.e., failure on the part of the assessee to disclose fully and truly all material facts which were necessary for its assessment for the year under consideration i.e. A.Y.2007-08, we are afraid that the same too has not been satisfied in the case of the present assessee before us. Considering the fact that the assessee had
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duly disclosed the transportation charges in question of Rs.7,44,681/- (supra) a/w the fact that it had not deducted tax at source on the same in its return of income for the year under consideration, therefore, by no means it can be assumed that there was any failure on its part to disclose fully and truly all material facts necessary for its assessment for the year under consideration. In fact, we find that on a perusal of the “reasons to believe”, it transpires that it is not even the case of the department that the concluded assessment of the assessee was being reopened for the reason that the there was failure on its part to disclose fully and truly all material facts necessary for its assessment for the year under consideration.
In the backdrop of the aforesaid settled position of law, we are of the considered view that as the concluded assessment in the case of the assessee for the assessment year 2007-08 which was earlier framed by the A.O vide his order passed u/s.143(3) dated 25.06.2008 had been reopened vide notice u/s.148 dated 13.09.2012 i.e beyond a period of four years from the end of the relevant assessment year, de hors any failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the year under consideration, thus the same for want of valid assumption of jurisdiction on the part of the A.O could not be sustained and is liable to be struck down on the said count itself. Our aforesaid view is fortified by the judgments of the Hon’ble High Court of
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Delhi in the case of Pr. CIT Vs. M/s. Superior Films Pvt. Ltd., ITA No.153 of 2020 dated 19.07.2021 (Del) and that in the case of CIT Vs. Viniyas Finance & Investment Pvt. Ltd., ITA No.271 of 2012, dated 11.02.2013 (Del). Also, a similar view had been taken by the Hon’ble High Court of Bombay in the case of Ananta Landmark Pvt Ltd vs Deputy Commissioner Of Income Tax, WP No.2814 of 2019 dated 14.09.2021 (Bom). Also, we find that the Hon’ble Supreme Court in the case of New Delhi Television Ltd. vs Deputy Commissioner of Income Tax, (2020) 116 Taxmann.com 151 (SC) had, inter alia, held that though the assessee is obligated to disclose the “primary facts”, but it is neither required to disclose the “secondary facts” nor required to give any assistance to the A.O by disclosure of the other facts, and it is for the A.O to decide what inferences are to be drawn from the facts before him. It was categorically observed by the Hon’ble Apex Court that the extended period of limitation for initiating proceedings under the “1st proviso” to Section 147 of the Act would only get triggered where the assessee had failed to disclose fully and truly all material facts necessary for its assessment.
We, thus, in terms of our aforesaid observations quash the assessment that had been framed by the A.O in absence of valid assumption of jurisdiction to reopen the concluded assessment of the assessee u/s. 147 of the Act.
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As we have quashed the assessment framed by the A.O for want of valid assumption of jurisdiction, therefore, we refrain from adverting to and therein adjudicating other contentions that have been advanced by the Ld. AR, both as regards the validity of the assessment as well as sustainability of the addition so made on the merits of the case, which, thus, are left open.
In the result, appeal of the assessee is allowed in terms of our aforesaid observations. Order pronounced under rule 34(4) of the Appellate Tribunal Rules, 1963, by placing the details on the notice board. Sd/- Sd/- ARUN KHODPIA RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; �दनांक / Dated : 23rd September, 2022 **SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant. 2. ��यथ� / The Respondent. 3. The CIT(Appeals), Bilaspur (C.G) 4. The CIT, Bilaspur (C.G) 5.�वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण,रायपुरब�च, रायपुर / DR, ITAT, Raipur Bench, Raipur. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // �नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, रायपुर / ITAT, Raipur.