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06-03-2019, Kochaniyan Unnithan, Section 147, 153A, 148, Tribunal Cochin

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2 months 1 week ago #8754 by amit
Section - 147, 153A, 148
Order Date - 06-03-2019
Favouring - Assessee
Court - Tribunal Cochin
Appellant - Kochaniyan Unnithan
Respondent - DCIT
Citation - 319Taxpundit194
Appeal No. - I.T.A. No.76/Coch/2018
Asstt. Year - 2005-06



These appeals filed by different assessees are directed against the different orders of the CIT(A), Trivandrum and pertain to the assessment year 2005-06.

2. The grounds raised by the assessees are common which are as follows:

1) The order of the Commissioner of Income Tax Appeals, Trivandrum is against law, facts and circumstances of the case.

2) The CIT Appeals erred in holding that the re-opening of the assessment, originally completed U/s 153 A r.w.s 143 (3) of the I. T. Act, U/s 147 after 4 years from the end of the relevant asst year was valid inspite of the decision of the Supreme Court in the case of Ref CIT and Anr Vs. Foramer France 264 ITR 566.

3) The CIT Appeals should have noted that when all the material facts were fully and ruly disclosed at the time of original assessment , there was no failure on the part of the Appellant to disclose fully and truly all relevant facts before the A.O , who completed the assessment U/s 153A r.w.s 143 (3) of the I.T Act. Ref Macdermott International Inc Vs Addl. CIT and Anr 259 ITR 138 (Uttaranchal).

4) The CIT Appeals should have noted that the Cochin Tribunal in the case of M/s Cordial Company , in which the Appellant was a partner for the asst year 2004-2005, on similar facts held in ITA No. 119/ Coch/2013 dtd 22/11/2013, that the re-opening of the assessment after four years from the end of the asst year was invalid under the proviso to Section 147 of the I. T. Act , since the original asst in that case was completed U/s 153A r.w.s 143 (3) and the assesee has furnished at the time of original assessment, the current account copies of the partners , on specific request from the A.O. So there was no failure on the part of the assessee to disclose the necessary particulars.

5) The CIT Appeals should have noted that the A.O did not also state what relevant facts , if any, was not disclosed by the Appellant before the A.O at the time of original asst which led him to re-open the asst after 4 years. Ref Yakub Ali Gopal Singh and Party Vs DCIT and Anr 209 CTR (Raj) 136.

6) The CIT Appeals should also have noted that the A.O did not also disclose in the reasons recorded as to which fact or material was not disclosed by the Appellant fully and truly which was necessary for the assessment of the asst year 2005-2006, so as to establish the vital link between the reasons and the evidence. Therefore the re-opening should have been held as invalid. Ref. Hindustan Liver Ltd Vs. R.B. Wadkar AC1T and Anr 268 1TR 332.

7) As the notice U/s 148 was issued without recording that "there was failure on the Appellant's part to disclose fully and truly all material facts necessary for the asst for the asst year 2005-2006, the re-assessment notice issued after

4 years should have been held as invalid by the CIT Appeals . Ref. Titanor Components Ltd Vs. Asst CIT and Ors 243 CTR (Bom) 520.

3. The assesses herein have also raised additional ground which reads as follows:

1. The order passed u/s. 143 r w.s 147 of the I.T. Act is barred by limitation since the Notice u/s. 148 was issued only on 11/07/2011 i.e. during the assessment year 2012-13, only on the 7th year after the end of the relevant assessment year 2005-06.

4. At the time of hearing, the Ld. AR made an endorsement to the effect that the assesses herein did not want to pursue the additional ground. As such, the additional ground raised by the assessees is dismissed as not pressed.

5. Since the facts in these appeals are similar, we consider the facts as narrated in ITA No. 76/Coch/2018. The assessment for the year under consideration was originally completed u/s. 153A r.w.s. 143(3) of the Act vide order passed on 21/12/2007. The assessment was then re-opened vide notice issued u/s. 148 of the Act on 11/07/2011. The reason for reopening the assessment was that the closing balance in the current account of the assesse with the firm M/s. Cordial Company as on 31/03/2014 was (-) Rs.10,09,073/- whereas the opening balance as on 01/04/2004 was (-) Rs.8,48,477/-. This clearly indicated that the assessee had credited an amount of Rs.1,60,596/- to the account which is not disclosed in the return of income filed for the assessment year under consideration. Since an amount of Rs.1,60,596/- had escaped from the assessment, notice u/s. 148 was issued which in turn was responded by the assessee vide letter file on 20/07/2011 requesting to treat the return which was filed originally on 01/12/2007 as filed in response to the notice issued. In response to the notices issued subsequently u/s. 142(1) and 143(2) of the Act, the authorized representative had raised objection and challenged the very reopening of the assessment which the Assessing Officer had not entertained. Since the assessee could not furnish any valid explanation with regard to difference in closing balance with the firm M/s. Cordial Compnay to the turn of Rs.1,60,596/-, the same was treated as income escaped from assessment and accordingly, added to the income returned in the absence of satisfactory explanation offered.

5. Against this, the assessee went in appeal before the CIT(A). Before the CIT(A) the assessee relied on the decisions of Hon'ble Supreme Court in the case of CIT vs Foramer France (284 ITR 66), Hon'ble High Courts of Uttaranchal (259 ITR 138), Rajasthan (209 CTR 136), Bombay (243 CTR 520) and also the decision of the Hon'ble ITAT, Cochin Bench in the case of Southern Cashew Exporters vs DCIT in ITA No.529/Coch/2010 dt. 02.03.2012. The case of the assessee was that the sole reason for reopening the assessment was based on this current account a copy of

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