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TMI Blog2014 (1) TMI 1128X X X X Extracts X X X X X X X X Extracts X X X X ..... completed assessment, in view of the full disclosure of the material facts relevant to the assessment of the assessee for Assessment Year 2004-05, was nothing other than a mere change of opinion, which is impermissible in lawThe reasons recorded do not lay out any failure on the part of the assessee to disclose fully and truly any material fact necessary for its assessment for Assessment Year 2004-05 – For reopening the assessment, the proviso to Section 147 comes into play - Once the assessee had duly disclosed all material facts necessary for its assessment fully and truly before the Assessing Officer in the scrutiny assessment proceedings, for Assessment Year 2004-05, no action ought to have been taken u/s 147 of the Act, as envisaged by the proviso to Section 147 – Decided against Revenue. - ITA No. 5544/Del/2010 - - - Dated:- 5-12-2013 - Shri G. D. Agrawal And Shri A. D. Jain,JJ. For the Petitioner : Shri Salil Kapoor Shri Ankit Gupta, Advocates For the Respondent : Shri Bhim Singh, Sr. DR ORDER Per A. D. Jain, Judicial Member: This is department's appeal for Assessment Year 2004-05 against the order dated 16.09.2010, passed by the CIT (A), Muzaffarnagar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tries Pvt. Ltd.) Date: 17.08.2011/13.06.2011 Place: New Delhi." 3. In support of the aforesaid application, the ld. Counsel for the assessee has contended that the notice issued to the assessee u/s 148 read with Section 147 of the IT Act is barred by limitation and, as such, all proceedings pursuant thereto are illegal; that the notice u/s 147 read with Section 143 (3) of the Act was issued on 28.07.2009, i.e., after the expiry of four years from the end of the relevant assessment year, which is Assessment Year 2004-05; that such issuance of notice is against the proviso to Section 147 of the Act, which requires that where an assessment u/s 143(3) of the Act or u/s 147 of the Act has been made for the relevant Assessment Year, no action shall be taken u/s 147 of the Act after the expiry of four years from the end of the relevant Assessment Year, unless any income chargeable to tax has escaped assessment for such Assessment Year by reason of the failure on the part of the assessee to make a return u/s 139 or in response to a notice u/s 142 (1) or Section 148 or to disclose fully and truly all material facts necessary for his assessment, for that Assessment Year; that the notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st him. Reliance has been placed on 'CIT-IV vs. Jamnadas Virji Shares Stock Brokers (P) Ltd.', 21 taxmann.com 27 (Bom) (copy is placed on record). The Ld. DR has contended that specific material had been received by the Assessing Officer from the Investigation Wing of the Department after the completion of the assessment u/s 143 (3) of the Act. And as such, the Assessing Officer, on the basis of such information, was definitely entitled to reopen the completed assessment. Reliance has been placed on 'Raymond Woolen Mills vs. ITO and Ors.', 236 ITR 34 (SC) and 'Rajesh Zaveri', 251 ITR 500(SC). 5. We have heard the parties on this issue. The Ld. CIT (A) has decided this issue against the assessee, holding as follows:- "......The Ground of A.O's action of reopening the proceedings u/s 147 of the Act is fully valid and proper. The A.O. had vital information from a responsible authority. The nature of information was very important, giving clear-cut indication of tax evasive accommodation entries being used by a syndicate of persons and groups; the assessee being a major beneficiary. Thus the A.O. was not only within his rights, but rather duty bound to reopen the case u/s 147 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent, on any of the grounds decided against him. 9. Further, as noted in 'Jamnadas Virji' (supra) itself, in 'D.R. Bamasi vs. CIT', 83 ITR 223 (Bom), it had been long back settled that the respondent in an appeal is undoubtedly entitled to support the decree which is in his favour on any grounds which are available to him, even if the decision of the Lower Court in his favour may not have raised those grounds and that the powers of the Tribunal are similar to those of an Appellate Court under Order XLI Rule 22 of the CPC. 10. In 'ITO vs. Smt. Gurinder Kaur', 102 ITD 189 (Del), it has also been held, noticing 'Hukumchand Mills vs. CIT', 63 ITR 232 (SC), that even de horse Rule 27 of the ITAT Rules, it is open to the respondent in an appeal before the Tribunal to raise a new ground in defence of the Order appealed against and that even assuming that Rule 27 is not strictly applicable the Tribunal has inherent powers u/s 254 (1) of the Act to entertain the argument of the Respondent which amounted to a new ground; that Rule 27 is not exhaustive of the powers of the Tribunal; and that it is merely not procedural in character and does not, in any way, circumscribe or control ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eof is at APB 47. The reasons recorded for such action are dated 07.07.2009 (APB 48). Thus, evidently, the notice u/s 147 of the Act was issued after the expiry of four years from the end of the Assessment Year 2004-05. Now, this could be done, as per the proviso to Section 147, if there had been failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment, for Assessment Year 2004-05. The question is as to whether there was, in fact, any such failure on the part of the assessee. 15. During Assessment Year 2004-05, the assessee company had received share application money of ₹ 5 lacs each from M/s Maple Sales Pvt. Ltd. and RGS Marketing Pvt. Ltd. In the original assessment, the assessee related before the Assessing Officer that these amounts had been received through draft Nos.544065 (APB 98) and 544066 (APB 102), respectively. The assessee, on the Assessing Officer's query, filed reply dated 25.10.2006 (APB 92-104) before the Assessing Officer. This reply was accompanied by copies of the said drafts, list of shareholders and other evidence. It was thereafter, that the scrutiny assessment order dated 12.09.2008 was passed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account books, since these entries are not at all traceable in books of accounts, on the basis of information as provided by your good self. No such amount has been credited in the books as company has not received the same from Shri Deepak Gupta as alleged." As the assessee Co. has failed to disclose truly the nature and source regarding these entries, I have reason to believe that the aforesaid accommodation entry/entries amounting to Rs.10,02,500/- represents the income of the assessee which has escaped assessment on account of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the assessment year 2004-05 for which action u/s 147 of the IT Act, 1961 is required and accordingly notice u/s 148 of the IT Act, 1961 is issued for the Assessment Year 2004-05. Dated, 17.07.2009 Sd/- (S.R. Kaushik) Asstt. Commissioner of Income Tax Circle-2, Muzaffarnagar." 17. The aforesaid reasons do not lay out any failure on the part of the assessee to disclose fully and truly any material fact necessary for its assessment for Assessment Year 2004-05. And for doing so, the proviso to Section 147 comes into play. Once the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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