Calcutta High Court
Principal Commissioner Of Income Tax-4 vs J.J. Development Pvt. Ltd on 14 June, 2018
Author: Sanjib Banerjee
Bench: Sanjib Banerjee, Abhijit Gangopadhyay
OD-1
ITAT No. 404 of 2016
GA No. 3270 of 2016
GA No. 3271 of 2016
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction(Income Tax)
ORIGINAL SIDE
PRINCIPAL COMMISSIONER OF INCOME TAX-4, KOLKATA
Versus
J.J. DEVELOPMENT PVT. LTD.
BEFORE:
The Hon'ble JUSTICE SANJIB BANERJEE
AND The Hon'ble JUSTICE ABHIJIT GANGOPADHYAY Date : June 14, 2018.
Appearance:
Mr. S.N. Dutta, Adv.
Ms. Soma Chatterjee Mishra, Adv.
Mr. Prabir Banerjee, Adv.
The Court : In view of the good grounds shown, the delay in preferring the appeal is condoned despite the objection of the assessee.
The appeal is directed against an order of the Appellate Tribunal by which proceedings initiated under Section 147 of the Income Tax Act, 1961 for reassessment were quashed.
The principal ground urged by the Revenue is that in course of the Assessing Officer conducting reassessment under Section 147 of the Act, it was discovered that one of the purchasers of a flat from the assessee claimed to have made a cash payment to a liaison agent for the acquisition of the relevant flat. Though no direct allegation was made by the purchaser against the assessee, the Assessing Officer deemed it prudent to proceed against the assessee on such 2 count on the reasoning that the assessee who was the seller of the flat must have been the beneficiary of the cash payment made by the purchaser.
In the assessee's appeal before the Commissioner (Appeals), the Commissioner found that there was no direct allegation of the assessee or the assessee's agent having received the alleged cash payment. Though the Commissioner noticed that the assessee chose not to cross-examine the purchaser on the date fixed and the relevant director of the assessee gave an excuse for his absence on the scheduled date, the Commissioner was of the opinion that the receipt of the cash payment by the assessee had not been sufficiently made out by the purchaser or in course of the reassessment by the Assessing Officer.
The Commissioner's order was challenged before the Appellate Tribunal. The Appellate Tribunal found that the Assessing Officer had acted beyond the scope what was permissible in course of reassessment. The Appellate Tribunal relied on judgments of several High Courts for the proposition that in course of proceedings under Section 147 of the Act, it is only such income chargeable to tax which had escaped assessment for an assessment year with respect to which the Assessing Officer had reason to believe that it had escaped assessment, can an order of reassessment be made. In other words, if an Assessing Officer had reason to believe that some income had escaped assessment on one score, and he had issued a notice under Section 148 of the Act in such regard, he may not, in course of the proceedings under Section 147 of the Act, discover some other additional income and bring the same to tax. On such ground, the Appellate 3 Tribunal quashed the proceedings under Section 147 of the Act and it does not appear that the Appellate Tribunal can be faulted on such score.
The Revenue's sentiment is appreciated. However, in the circumstances, both on facts and on the legal position, the order impugned passed by the Appellate Tribunal or the order of the Commissioner negating the addition of income on account of alleged cash payment cannot be reconsidered.
ITAT No. 404 of 2016 along with GA No. 3270 of 2016 and GA No. 3271 of 2016 are disposed of.
There will be no order as to costs.
(SANJIB BANERJEE, J.) (ABHIJIT GANGOPADHYAY, J.) sg.