Reassessment proceeding initiated by Assessing Officer (AO) beyond four years from the end of the relevant assessment year is bad in law – Income Tax Appellate Tribunal (ITAT), Delhi [Ajay Singhal vs. ITO, New Delhi]
ITA no. 6191/Del/2015, Order dated 22.08.16
Decision: In favour of Asssesse.
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH “SMC-3” NEW DELHI
BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER
ITA no. 6191/Del/2015
Amit Singhal Vs. Income-tax Officer,
A-108, Gujranwala Town, Ward 36(5), New Delhi.
PAN: AAJPS 3839 G
( Appellant ) ( Respondent )
Appellant by : Shri S.K. Singhal Adv. .
Respondent by : Shri Rajesh Kumar Sr. DR
Date of hearing : 18-08-2016
Date of order : 22/08-2016.
O R D E R
PER S.V. MEHROTRA, A.M:-
This is assessee’s appeal against the CIT(A)-32, New Delhi’s order dated 30.10.2015 in appeal no. 94/243/2013-14, relating to A.Y. 2007-08.
2. Brief facts of the case are that the assessee, in the relevant assessment year, filed his return of income declaring taxable income of Rs. 3,98,890/-. Original assessment was completed u/s 143(3) vide order dated 16.12.2009 at an income of Rs. 4,56,690/-. The AO issued notice u/s 148 on 29.8.2012. The AO has mentioned in the assessment order that this notice was issued in order to examine the depreciation claimed and availed by the assessee in respect of items like machinery, kneader and boiler. Verification of expenses claimed for purchase of control panel & thyristors and further in order to examine the household withdrawal expenses shown under the head ‘direct expenses’, claimed during the year under assessment. The assessment was completed at a total income of Rs. 17,20,811/- after making a total addition of Rs. 13,21,921/-.
2.1. Before ld. CIT(A) the assessee had, inter alia, challenged the proceedings initiated u/s 148 on the ground that since the original assessment order passed u/s 143(3) was set aside by the Tribunal on 7.8.2012, any further assessment beyond statutory limitation was of no consequence and unlawful. Ld. CIT(A) took note of the grounds of appeal in the appeal filed before ITAT, which have been reproduced at page 7 of his order and concluded that present issues, namely, deprecation capital expenditure in the form of purchase of control panels and thyristors and house hold withdrawal were not the subject matter of appeal either before CIT(A) or before ITAT. He, therefore, rejected the assessee’s contention that once ITAT has passed the order, no reassessment can be done in the same assessment order.
3. Aggrieved, the assessee is in appeal before the Tribunal and has taken following grounds of appeal:
1. Whether the learned CIT(A) was justified in dismissing appeal in the facts and in law;
2. Whether the CIT(A) was justified in dismissing Appeal without considering support from cited / various case laws upto Hon’ble Supreme Court of India;
3. Whether reassessment could be valid to circumvent setting aside of original assessment u/s 143(3) by Hon’ble ITAT on 07.08.2012;
4. Whether change of opinion was justified to reassess under section 148, initiating proceedings on 29.08.2012, after over 4 years of Assessment year 2007-08;
5. Whether parallel proceedings dated 29.08.2012 u/s 148 be valid before concluding proceedings dated 23.03.2012u/s 154;
6. Whether the Audit Report in form 3CB u/s 44AB dated 01/09/2007 and statement of particulars in form 3CD, particularly at clause 14 and 17(b) could be ignored without any
finding against it, whatsoever?
7. Whether Rule of Law/ law of precedence be overlooked, simply to reassess and dismiss Appeal arbitrarily in prejudiced manner, without application of mind on the facts/ submissions, ignoring even recent strictures of jurisdictional High Court against unlawful harassment of assesses
4. The assessee personally appeared and referred to page 34 of appeal set wherein the Tribunal’s order in original proceedings is contained. He further referred to page 29 of PB, wherein the notice dated 29.8.2012, issued u/s 148 is contained and pointed out that the notice has been issued beyond 4 years from the end of assessment year. He further pointed out that no reasons have been supplied along with the notice.
5. Ld. DR submitted that the issues raised in the present proceedings were not subject matter of original assessment proceedings and, therefore, reassessment notice was valid.
6. I have considered the submissions of both the parties and have perused the material available on record. Admittedly the notice has been issued beyond four years from the end of the relevant assessment year, therefore, in view of proviso to section 147, unless there was failure on the part of assessee to disclose fully and truly all material facts necessary for his assessment, no reassessment proceedings could be initiated. Further, I find that no reasons have been supplied along with the notice in which most of the columns are blank. Under such circumstances, I am of the opinion that the reassessment proceeding initiated by AO was bad in law, more particularly because the whole object was to make fresh inquires, which i not permissible, more particularly, beyond four years from the end of the relevant assessment year.
7. In the result, assessee’s appeal is allowed.
Order pronounced in open court on 22-08-2016.
( S.V. MEHROTRA )
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