×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
The captioned two appeals filed by the Revenue and two cross objections filed by the respective Assessee, pertaining to assessment year 2009-10, are directed against the separate orders passed by the ld. Commissioner of Income Tax (Appeals), Kolkata, in Appeal Nos. 11247/CIT(A)-20/Kol/CC-2(1)/16-17 and 11198/CIT(A)-20/Kol/CC291)/16-17 respectively, both dated 18-07-2017, which in turn arise out of separate assessment orders passed by the Assessing Officer under section 143(3)/147 of the Income-Tax Act, 1961 (in short, the ‘Act’) dated 07.12.2016 and 31.10.2016 respectively.
2. Since, the issues involved in all the appeals and cross objections are common and identical; therefore, these appeals have been heard together and are being disposed of by this consolidated order. For the sake of convenience, the grounds as well as the facts narrated in Revenue’s appeal in ITA No.2144/Kol/2017, for the A.Y 2009-10 and C.O No. 91/Kol/2017 for assessment year 2009-10, have been taken into consideration for deciding the above appeals and cross objections en masse.
3. Although, these two appeals filed by the Revenue for Assessment Year 2009-10 (in ITA No.2144/Kol/2017 and in ITA No.2145/Kol/2017) and CrossObjections filed by the Assessee in Assessment Year 2009-10 (in CO. No.91/Kol/2017 and CO No. 90/Kol/2017) contain multiple ground of appeals However, at the time of hearing, we have carefully perused all the grounds raised by the Revenue as well as cross objections raised by the Assessee. Most of the grounds raised by the Revenue as well as Assessee, are either academic in nature or contentious in nature. However, to meet the end of justice, we confine ourselves to the core of the controversy and main grievances of Revenue and the Assessee as well. With this background, we summarize and concise the grounds raised by the Revenue as well as Assessee as follows:
(1). The main grievance of the Revenue in revised grounds of appeal in ITANo.2144/Kol/2017 and in ITA No.2145/Kol/2017, is that on the facts and circumstances of the case, the Ld CIT(A) erred in law by allowing the technical grounds taken by the assessee holding the reasons recorded by the AO is void ab initio. The Ld. CIT(A) failed to examine the facts of this case in which original assessment was done u/s 43(1)(a) and not 143(3) and hence first proviso to section 147 did not apply in the instant case. And the Ld. CIT(A) erred in allowing assessee's appeal on the grounds that there was no material before AO to satisfy the requirements u/s 147 as enough material was available with AO and assessee failed to disclose all materials facts for his assessment.
(2). The main grievance of the Assessee in Cross Objection and Revised Cross Objection in CO. No.91/Kol/2017 and in CO. No.90/Kol/2017, is that the Learned Assessing Officer has erred in making addition of Rs. 4,95,00,000/- under section 68 of the Income Tax Act on the basis that director of the share allottees company was not produced before him. Share applicants companies couldn't be physically found at their given address. The Ld. CIT (A) has erred in not adjudicating this ground on merit. Assessee also raised the technical ground in cross objection stating that Learned Assessing Officer has issued notice under section 148 of Income tax Act 1961 after the expiry of four years from the end of the relevant assessment year without satisfaction of Principal CIT on the reasons recorded as per the provision of section 151 of the Act. As such, the notice under section 148 of the Act is thus ab-initio void and consequential proceedings are liable to be quashed.
4. First, we shall take Revenue’s appeal in ITA No.2144/Kol/2017, for the A.Y 2009-10 (lead case). The summarized and concise grounds of appeal is reproduced below for ready reference as follows:
(1). The main grievance of the Revenue in revised grounds of appeal in ITANo.2144/Kol/2017 and in ITA No.2145/Kol/2017, is that on the facts and circumstances of the case, the Ld CIT(A) erred in law by allowing the technical grounds taken by the assessee holding the reasons recorded by the AO is void ab initio. The Ld. CIT(A) failed to examine the facts of this case in which original assessment was done u/s 143(1)(a) and not 143(3) and hence first proviso to section 147 did not apply in the instant case. And the Ld. CIT(A) erred in allowing assessee's appeal on the grounds that there was no material before AO to satisfy the requirements u/s 147 as enough material was available with AO and assessee failed to disclose all materials facts for his assessment.
5. Brief facts qua the issue are that the assessee company filed its Return of income for the A.Y. 2009-10, u/s 139 on 05.09.2009 disclosing total income to the tune of Rs. Nil, which was processed u/s 143(1) of the Income tax Act,1961. Later on, assessment was reopened by the assessing officer under section 147/148 of the Act. The assessing officer noticed that during the year under consideration, assessee company raised share capital of Rs.4,95,00,000/-. Subsequently on the basis of information available on record it is found that the capital raised by assessee company is nothing but unaccounted income which has been enrooted in the form of share capital through the Jamakharchi, shell, and Paper Companies amounting to Rs. 4,95,00,000/-. The assessing officer was of the view that assessee brought back its undisclosed income in the business in the guise of share Capital. Under this circumstances, there was reason to believe that income to the tune of Rs.4,95,00,000/- chargeable to tax has escaped assessment within the meaning of section 147 of the Income Tax Act,1961. Keeping in vi w the above facts, the notice u/s 147/148 of the Income Tax Act, 1961 was issued upon the assessee.
In response to this notice, assessee filed its return on 07.05.2016 declaring total income of Rs. Nil. The assessee has also asked for the reasons for reopening which was duly provided. The notice U/s 143(2) and 142(1) along with questionnaire was issued on 22.07.2016 which was duly served upon the assessee. The case was fixed for hearing on 19.07.2016 before the AO. In response to said notice, assessee submitted an objection petition against the notice u/s 148 of the Act and requested to pass a speaking order against the objections before proceeding for assessment. Accordingly, a speaking order was passed on 05.07.2016 in this respect and the said order was duly served upon the assessee.
6. Thereafter, the ld assessing officer dealt the issue on merits and he noticed from the paper books filed by the assessee that assessee company raised share capital of Rs.4,95,00,000/- at a face value of Rs. l0/- with premium of Rs.40/- per share during the