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TMI Blog2015 (3) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequently he changes his opinion or some other officer takes a different view. The relevant facts were taken into consideration by the Assessing Officer while making the assessment and, therefore, there was no question of any escapement of income chargeable to Income-tax. Therefore, it was a case of wrongful assumption of jurisdiction and as such the notices, the speaking orders and the assessment orders made in pursuance to the notices were required to be quashed and set aside and were, accordingly, set aside. We uphold the order of the Commissioner of Income-tax (Appeals) in holding the reassessment proceedings to be invalid and consequently assessment framed thereunder in pursuance thereto to be void ab initio. - Decided in favour of assessee. Deletion of addition made under section 40(a)(ia) - Held that:- The assessee was making payment for carriage of goods and there was admittedly no oral or written agreement between the assessee and transporters and in the absence of the same, there is no merit in the order of the Assessing Officer in holding that the provisions of section 194C of the Act had been violated. In the absence of the same no disallowance is warranted under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated December 8, 2008. Thereafter notice under section 148 of the Act was issued to the assessee on June 10, 2009. In response to the notice issued under section 148 of the Act the assessee filed revised return declaring income of ₹ 4,15,160. The assessee filed the said return in protest and the Assessing Officer had noted that no objections were raised to the continuation of the proceedings under section 147/148 of the Act. The assessee was asked to produce complete details regarding its business of booking the tankers from different parties and supplied to the customers. The assessee had claimed that no TDS was required to be deducted from the freight expenses as Forms 15-I and 15-J had been submitted to the Department. The Assessing Officer examined Form 15-J submitted by the assessee and found certain discrepancies. The assessee was show caused to explain as to why the expenses of ₹ 62,21,063 should not be disallowed in view of the provisions of section 40(a)(ia) of the Act. The Assessing Officer ultimately made addition of ₹ 62,21,063 as the assessee had failed to deduct TDS under the provisions of section 194C of the Act and consequently disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epted, the same would not amount to default under the provisions of section 194C of the Act and, therefore, no consequent addition was called for under section 40(a)(ia) of the Act. It was further held by the Commissioner of Income-tax (Appeals) that the provisions of section 194C of the Act were not applicable to the facts of the case as the assessee had only hired the trucks from time to time. Reliance was placed on the ratio laid down by the hon'ble Punjab and Haryana High Court in CIT v. United Rice Land Ltd. [2010] 322 ITR 594 (P H) and the addition made by the Assessing Officer was deleted. 7. The Revenue is in appeal against both aspects of the issue, i.e., vide ground No. 1 the Revenue has raised the issue against reassessment proceedings and vide ground No. 2 against the deletion of addition on the merits. 8. The learned Departmental representative for the Revenue pointed out that the original assessment was completed under section 143(3) of the Act and reassessment proceedings were initiated on perusal of the profit and loss account. 9. The learned authorised representative for the assessee in reply submitted that reassessment proceedings in the case of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these are on account of diesel expenses, tanker repair expenses, spare parts and payable to various tanker owners. It is noticed that diesel expenses, tanker repair expenses, etc., have been booked to the income and expenditure account, whereas no expenditure on account of payment made/payable to other tankers have been booked. The assessee has been maintaining separate account of tankers engaged to carry out the contract and has been crediting the bill raised and debiting the payments made to them. The payable as on March 31, 2006 has been shown as liability. 2.3 In the immediately preceding year, i.e., assessment year 2005-06, the assessee has debited a sum of ₹ 80,76,983 to the income and expenditure account on account of freight paid. 2.4 During the year under consideration, the assessee has changed its method of accounting of freight paid, i.e., instead of debiting the same to the income and expenditure account, he has maintained separate account. The intention of the assessee behind this change of accounting is to get rid off the provisions of section 40(a)(ia) of the Income-tax Act, 1961. Since the assessee was liable to deduct tax on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded in the present case are based on same facts/ information as was available on record when the original assessment proceedings were conducted in the hands of the assessee. In the absence of any fresh facts coming to the knowledge of the Assessing Officer, there is no merit in the reassessment proceedings initiated against the assessee. The hon'ble Supreme Court in CIT v. Kelvinator of India Ltd. [2010] 320 ITR 561 (SC) had held as under (page 564) : On going through the changes, quoted above, made to section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, reopening could be done under the above two conditions and fulfilment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act (with effect from April 1, 1989), they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, conferred jurisdiction to reopen the assessment. Therefore, post April 1, 1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words 're ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as concealment or there was no application of mind at all, then a case for reopening the assessment could be made out. But, when all the facts were placed before the Assessing Officer and the Assessing Officer consciously considered the facts and arrived at a decision, then it cannot be reopened merely because subsequently he changes his opinion or some other officer takes a different view. The relevant facts were taken into consideration by the Assessing Officer while making the assessment and, therefore, there was no question of any escapement of income chargeable to Income-tax. Therefore, it was a case of wrongful assumption of jurisdiction and as such the notices, the speaking orders and the assessment orders made in pursuance to the notices were required to be quashed and set aside and were, accordingly, set aside. The petition was allowed. 14. Applying the above said principles we uphold the order of the Commissioner of Income-tax (Appeals) in holding the reassessment proceedings to be invalid and consequently assessment framed thereunder in pursuance thereto to be void ab initio. The ground of appeal No. 1 raised by the Revenue is dismissed. 15. Now coming to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also recorded a finding of fact that the Department had not controverted the said finding of the Commis sioner of Income-tax (Appeals) even before it. While recording the finding of fact, the Tribunal had clearly stated that nothing had been brought on record by the Assessing Officer to prove that there was any written or oral agreement between the alleged parties for carriage of the goods. In view of that, no interference was called for with the finding of fact recorded by the Tribunal. The appeal, being without merit, was to be dismissed. 17. In the facts of the present case also, the assessee was making payment for carriage of goods and there was admittedly no oral or written agreement between the assessee and transporters and in the absence of the same, there is no merit in the order of the Assessing Officer in holding that the provisions of section 194C of the Act had been violated. In the absence of the same no disallowance is warranted under section 40(a)(ia) of the Act. Upholding the order of the Commissioner of Income-tax (Appeals) we dismiss ground No. 2 raised by the Revenue. I. T. A. No. 1084/Chd/2013-assessment year 2010-11 18. The Revenue in I. T. A. No. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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