×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
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10-06-2019, Oriental Bank of Commerce, Section 147, 151(1), 148, Tribunal Delhi
Appellant, DCIT, Circle 19 (1), New Delhi (hereinafter referred to as the ‘Revenue’) by filing the present appeal sought to set aside the impugned order dated 02.05.2016 passed by the Commissioner of Income-tax (Appeals)-7, New Delhi qua the assessment year 2006-07 on the grounds inter alia that :-
“"On the facts and circumstances of the case, the ld. CIT(A) has erred in law and facts in quashing the reassessment order passed u/s 147/143(3) of the Income Tax Act, 1961 by the Assessing Officer without appreciating the facts that the assessee company has not truly and fully disclosed all the facts before the Assessing Officer and it did not produced any material facts on record before the Assessing Officer at the time of assessment proceedings as well as reassessment proceedings.”
2. Briefly stated the facts necessary for adjudication of the controversy at hand are : Initially, assessment of the assessee was completed under section 143 (3) of the Income-tax Act, 1961 (for short ‘the Act’) vide order dated 27.11.2007 at an income of Rs.714,07,00,170/-. Thereafter, AO, after recording the reasons for reopening, issued a notice u/s 148 of the Act to which assessee filed objections which have been disposed off.
3. AO after declining the contentions raised by the assessee that“assumption of jurisdiction to initiate the proceedings u/s 147/143 (3) in view of proviso to section 147, put in specific restriction on the AO to reopen the case in which assessment has been completed u/s 143 (3) of the Act when the assessee has fully and truly disclosed all material facts necessary for assessment”, AO proceeded to make addition of Rs.14,04,00,000/- debited in P&L account as provision on account of staff welfare fund.
4. Assessee carried the matter by way of an appeal before the ld. CIT (A) who has deleted the addition after allowing the appeal. Feeling aggrieved, the Revenue has come up before the Tribunal by way of filing the present appeal.
5. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
6. Undisputedly, reopening u/s 147 of the Act has been made by AO beyond a period of four years after framing assessment u/s 143 (3) of the Act. It is also not in dispute that all the items as to provisions of Rs.14,04,00,000/- on account of staff welfare and provision of Rs.2,83,51,006/- on account of expenses are items of the balance sheet.
7. Challenging the impugned order passed by the ld. CIT (A), ld. DR for the Revenue contended inter alia that it is not a case of change of opinion; that the AO was having prima facie material on the basis of which reopening has been made and relied upon the assessment order. Ld. DR also relied upon the decisions rendered by Hon’ble Supreme Court as well as Hon’ble High Court cited as R.K. Malhotra, ITO vs. Kasturbhai Lalbhai 109 ITR 537 (SC), Raymond Woollen Mills Ltd. vs. ITO 236 ITR 34, CIT vs. P.V.S. Beedies Ltd. 237 ITR 13 (SC), Yuvraj vs. UOI 315 ITR 84 (SC), Honda Siel Power Products Ltd. vs. DCIT 340 ITR 64 (SC), Honda Siel Power Products Ltd. vs. DCIT 340 ITR 53 (Delhi), New Delhi Television Ltd. vs. DCIT (2017) 84 taxmann.com 136 (Delhi), Sun Direct TV Pvt. Ltd. vs. ACIT (2018) 98 taxmann.com 201 (Madras), A Sridevi vs. ITO 2018-TIOL-2246- HC-MAD-IT, South Asia FM Ltd. vs. ACIT (2018) 98 taxmann.com 200 (Madras), Pranawa Leafin (P.) Ltd. vs. DCIT (2013) 33 taxmann.com 454 (Bombay), CIT vs. Kiranbhai Jamnadas Sheth (HUF) (2013) 39 taxmann.com 116 & Dishman Pharmaceuticals & Chemicals Ltd. 346 ITR 228 (Guj.).
8. However, on the other hand, to repel the arguments addressed by the ld. DR for the Revenue, ld. AR for the assessee contended inter alia that when the assessee has fully and truly disclosed all the material particulars necessary for assessment, reopening s not permissible; that the reasons recorded do not justify reopening u/s 147/148 in case of completed assessment u/s 143(3) as no tangible material has come to the light for initiating reassessment proceedings and relied upon the decisions cited as Allied Strips Ltd. vs. ACIT 384 ITR 424 (Delhi), Donaldson India Filters Systems Pvt. Ltd. vs. DCIT 371 ITR 87 (Delhi), Lalit Bagai vs. DCIT (2014) 91 CCH 7 (Del.)(HC), CIT vs. Valvoline Cummins Ltd. (2014) 90 CCH 0233 (Del.)(HC), Global Signal