Income Tax Appellate Tribunal - Kolkata
Dr Papiya Dutta, Kolkata vs Assessee on 18 September, 2015
I . T. A . N o. 6 71 / KOL ./ 20 1 5
A s se ssm e nt y e ar : 2008 - 20 0 9
Page 1 of 6
IN THE INCOME TAX APPELLATE TRIBUNAL,
KOLKATA 'SM C' BENCH, KOLKATA
Before Shri P.M. Jagtap, Accounta nt Me mber
I.T .A. No . 6 71 /KOL/ 20 15
Assess ment year : 2008 -2 00 9
Dr. Pap iya Dutta, .......................................................... ......A p p ella nt
CK-123, Se ctor-II,
Sa lt La ke ,
Kol ka ta -700 091
[PA N : A C TPD 8307 N ]
-Vs.-
Income Ta x Office r,........ .............................. ............. ........ .....Re sp ond ent
Wa rd -55(1), Kolka ta ,
54/1, Rafi A h med Kid wa i Road ,
Kol ka ta -700 016
Appeara nces by :
Shri K. M. R oy, F. C. A., f or the ass ess ee
Shri Budhadeb Mu kh opadhyay, JCIT, Sr. D.R., for th e Depa rt ment
Dat e of concluding t he hearin g : S ept emb er 1 6, 2015
Dat e of pr onouncing th e order : S ept emb er 1 8, 2015
O R D E R
This appeal filed by the as ses se e is directed again st the o rde r of ld. Commissioner of In come Tax ( Appeals)-6, Kolkata dated 26.0 2.2015 for the a sse ss ment year 2008-09.
2. The asse ssee in the presen t ca se is an individual, who is a Medical Practition er by Profession. The return of inco me fo r th e year unde r co nsideration was filed by her o n 24. 07.2008 declari ng tot al income of Rs. 3,05,290/-. The said retu rn was ini tially proce ssed by the A ss es sin g Officer und e r sectio n 143(1) of th e A ct. Subsequently, the ass ess ment, howeve r, was reopen ed by him and a notice un der s ection 148 was i ssued to the ass es see by h im on 23.07.2010 after reco rding the re asons. In reply, a request was made by the ass essee to t reat th e retu rn o ri ginally I . T. A . N o. 6 71 / KOL ./ 20 1 5 A s se ssm e nt y e ar : 2008 - 20 0 9 Page 2 of 6 filed by her o n 24. 07.2008 as the retu rn filed in response to the notice under section 148. Thereaft er the assessment was completed by the Assessing Officer under section 143(3) read with section 147 v id e ord er dated 21.12.20 11 co mputing th e to tal inco me of the assessee at Rs. 10,87,100/- afte r m aking the fo llo wi ng th ree additio ns:-
(i) Adv ance s received for p roviding Rs.6 ,50,000/-
v accination unde r s ection 6 8
(ii) Dis allowance of p ro mo tional Rs. 90,282/-
expen ses
(iii) Interest acc ru ed on F.D. Rs. 41,528/-
3. Again st the o rder p a ss ed by the A ssessin g O ffic er under section 143(3) read with section 14 7, an appeal wa s prefe rred by the asse ss ee before the ld . CIT(Appeals ). Durin g the cours e of appellat e p roc eedin gs before th e ld. CIT(App eal s), the re wa s, however, n o complian ce o n the part of th e as ses se e to v ario u s n otic es i ssu ed by the ld. CIT( Appeals) fixin g the h earin g f ro m time to ti me. Keepin g in vie w this no n-co mpliance on the part of the a ss ess ee, the ld. CIT( Appeal s) p roceed ed to disp o se of the appeal of the asse ss ee ex parte on me rit vide his impug ned ord er, wherein he confirmed all the three a dditio ns mad e by th e Ass es sin g Officer to the total inco me of the asses se e. Aggrieved by th e order of the ld. CIT(Appeal s), the ass ess ee h as preferred this appe al befo re the Trib unal.
4. In the p res ent appeal, the as sesse e has rai sed a p relimin a ry issue ch allenging the validity o f asses smen t m ade by the As ses sin g Offi ce r under section 143(3) read with s ectio n 147 of th e Act in G rou nd No. 1, while th e issues rais ed in Grounds No. 2 to 4 relate to the three additions mad e by the Assessin g Offic er and conf irmed by the ld. CIT(Appe als). A s the preli minary is sue rai sed in Ground No . 1 challengin g the validity of as se ssm ent mad e by the Assessin g Offi ce r was not rai sed befo re th e ld.
CIT(App eals) and th e sa me thus i s not ari sin g f ro m his i mpu gned o rde r, the as se sse e has moved an application seek in g ad mis sion of the relevan t Gro und No . 1 wherei n the prelimin ary issue rel atin g to validity of I . T. A . N o. 6 71 / KOL ./ 20 1 5 A s se ssm e nt y e ar : 2008 - 20 0 9 Page 3 of 6 as se ssm ent i s rai sed befo re the T ribunal for the first ti me. In the said app lication, the as ses see has reli ed on the decision of the Hon'ble Sup reme Court i n the c ase o f NTPC, wherein it was h eld by the Hon'ble Sup reme Cou rt that the legal issu e can be raised by the asse ssee at any sta ge p ro vided all th e f act s nec ess ary to adjudicate upon the said i ssu e are av ailable o n record . In the present case, the is sue sought to be rais ed by the as sesse e in th e addition al grou nd is pu rely a l egal i ssue and the rel evant fac ts nece ssary to adjudicate upon the sam e being av ailable on record as agreed even by the ld. D.R., I admit th e additional groun d raised by the ass ess ee and no w p roceed to ad ju dicate upo n the same first a s the same involves p reli mina ry i ssu e rel ati ng to validity of th e ass ess men t mad e by the A ssessin g Of ficer.
5. I have heard the argument s of both the sid es on the p reli min ary issu e raised by the assessee challengi ng the validity of the a ss ess ment and also p eru sed th e m at erial avail able on reco rd. As submitt ed by the ld. co unsel for the assessee by refe rrin g to the reason s record ed by the Assessing Officer fo r reopen in g th e asses sment, the a ss ess ment was reop ened by the A ss essin g Office r to exa min e o r veri fy the p articulars furnished by the assessee in the ret urn of inco me on the basi s of suspicio n and there wa s actually no reason fo r th e A ssessin g Of ficer to hav e a b elief that the income of the ass essee ch argeable to tax had escap ed ass es sment. Rely in g on the de cisio n of the Coordin ate B ench of this T ribunal in th e case of Deputy Di re ctor o f income T ax (Int ernation al Taxation)-21, Mu mbai -vs.- So ciete I ntern ation al De Tel ecommunication repo rted in 139 ITD 328 ( Mu mb ai), he h as co ntend ed that th e initi ation of reasses smen t p roce edin gs it self th erefo re, was invalid and th e as se ssm ent compl eted by the Assess i ng Offic er in pursuan ce of such invalid in itiation i s liable to b e cancelle d.
6. In orde r to appreciate the st and of the ld. counsel for the assess ee on this issue, it is pe rtin ent to ref er to the reason s reco rded by the I . T. A . N o. 6 71 / KOL ./ 20 1 5 A s se ssm e nt y e ar : 2008 - 20 0 9 Page 4 of 6 Assessing Offi cer for reop enin g the as ses sm ent, which are ext racted below:-
"Fro m th e ba la nce sh eet as on 31.03 .2007 a nd 31.03.2008 it was fo und th at th e capital balance were Rs.23,54 ,164.25 an d Rs.29,7 6,667.52 a nd u nsecur ed loan fro m other s were Rs.9,50,656 and Rs.18,00,656 r espectively, but n o interest were debited fo r talking loans/a dvances. During FY 07-08, the assess ee h ad shown long-term investmen t of Rs.37 ,91,377.93 and cur rent asset s, lo ans/advances o f Rs.7,26,215 .59.
From the above ana lysis of balance sh eet and pro fit & loss accou nt, it may be possible that the assess ee had intro duced her unaccoun ted money in disguise of loans /a dvances" .
It i s clearly evident fro m th e reasons re cord ed by the A ss essin g Office r that the re was actu ally no re aso n fo r h im to have fo rmed a belief abou t the escape men t of any income o f the asses see from th e asses sment, bu t the as ses sm ent was reopened by him to veri fy o r exa mine certain part iculars fu rni shed by the asses see in the retu rn of income, which acco rding to the A ssess ing Of ficer, might have possibly invo lved introd uction of he r un accounted money by the ass es see. It i s thu s clea r that the asse ss ment wa s reopen ed by the As sessin g Offic er on the basi s of suspicio n and in o rd er to make fi shin g and roa min g enquiri es, which, in my opinion, is not permi ssible. It is a settl ed po sition of law th at the as se ssm ent can be reopen ed under section 147/1 48 on th e basi s of 'reason to believe' and not 'reason to s usp ect'. A s h eld by the Coordinat e Bench of this Tribunal in the case of Deputy Director of inco me Tax (In te rn ational Taxation )-21, Mumbai -vs.- Societe Int ern ation al De Telecommunication ( sup ra) cited by the ld. counsel for the assess ee, unless the reasons to beli eve about th e e sc apement of inco me exist, no recou rse can be t aken to th e p ro vision s of s ection 147. It was held that where an Ass es sin g Of ficer ventu res to initiat e reas se ssment p ro ceedin gs with an o bject of findin g som e materi al about the escapemen t of inco me, such reassessment c annot legally stand and the law doe s not permit the Assessing Off icer to cond uct inquiries after the initiation of reassess men t I . T. A . N o. 6 71 / KOL ./ 20 1 5 A s se ssm e nt y e ar : 2008 - 20 0 9 Page 5 of 6 proce edin gs, to find if there i s an e sc ap ement of in come. It wa s held that the scope of sectio n 147 cannot encom pas s such an a ction under which ce rtain examin ation is to be co nducted for formin g a re ason to b elieve as to the escapement of income. If the facts o f the p res ent cas e in cludin g esp ecially the reasons record ed b y the Assessin g Office r fo r reo pen ing the asses sment a re co nsidered in the light of th e d ecision o f the Coordinat e Bench of this T ribunal in th e ca se of Deputy Director of inco me Tax (Int ernat ional Taxatio n)-21, Mumbai - vs.- So ciete Intern atio nal D e Teleco mmunicat ion (s upra), I a m of the v iew that the initiation of reassessment proceedin g itself was bad in law and the as se ssm ent co mpleted by the Asse ssin g Officer u nder s ection 143(3) read with section 147 in pursuan ce o f such inv alid initiation is li able to be cancelled. I ord er accordin gly.
7. Keepin g in view the d eci sio n rendered above on the prelimin ary issu e c anc elling th e a ssessment m ade by th e Assessi ng Office r unde r sect ion 143 (3) read with section 147, the other i ssu es raised by the as se sse e in this app eal disputin g t he additions made in th e said as se ssm ent hav e become in fructuous. I, therefo re, do n ot consider it neces sary or exp edient to adjud icat e up o n th e same.
8. In the result, the appeal of the assess ee is tre ate d as allowe d.
Orde r p ronounced in th e open Co urt on S eptembe r 18, 2015.
Sd/-
(P. M. Jagtap)
Accounta nt Me mber
Kolkata, the 18 t h day of September, 20 15
Co pies to : (1) Dr. Pap iya Dutta,
CK-123, Se ctor-II,
Sa lt La ke ,
Kol ka ta -700 091
(2) Income Ta x Office r,
Wa rd -55(1), Kolka ta ,
54/1, Rafi A h med Kid wa i Road ,
Kol ka ta -700 016
I . T. A . N o. 6 71 / KOL ./ 20 1 5
A s se ssm e nt y e ar : 2008 - 20 0 9
Page 6 of 6
(3) Comm iss ioner of Income-tax (Appeal s)-6, Kol kata (4) Com mis sioner of Incom e Tax, Kol kata (5) The Depar tmental R epr es entative (6) Guard Fil e B y order Assistant Reg istra r, Inco me Ta x Appellate Tribunal, Kolkata Ben ch es, Kolkata Laha/Sr. P.S.