TaxTMI 
TaxTMI 
2024 (11) TMI 310
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.... appeal in ITA no.349/Nag./2024, for assessment year 2016-17, the decision of which will apply mutatis mutandis to the appeal for the assessment year 2017-18 as well subject to modification in factual matrix giving rise to the periphery of dispute. ITA no.349/Nag./2024 Assessment Year - 2016-17 3. The assessee has raised following grounds:- "1. Whether on the facts and circumstances, the learned Pr.CIT has erred in concluding that assessment order passed by learned AO u/s 147 r.w.s 144B dated 29.03.2022 is erroneous and prejudicial to the interests of the revenue and in setting aside the assessment order with a direction to the learned AO to conduct enquiry and examination. 2. Whether on the facts and circumstances, the learned Pr.CIT erred in assuming jurisdiction under section 263 of the Act on issues which were never the subject-matter of the assessment in a proceeding initiated under section 147 of the Act. 3. Whether where jurisdiction under section 263 was sought to be exercised with reference to issues which were not subject of reopening of assessment, period of limitation provided in section 263(2) would commence from date of order of assessment u/s 143(1) and not ....
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....ereafter accepted the return of income filed by the assessee. Subsequently, the learned Commissioner exercising his powers conferred under section 263 of the Act revised the assessment on some other issues, which were not part of the reasons recorded. The learned Counsel further submitted that once the Assessing Officer post re-opening the assessment did not make any addition in respect of issues as per reasons recorded then he is precluded from making additions in respect of any other issues. In support of the arguments advanced by the learned Counsel, reliance was placed on the judgment of the Hon'ble Bombay High Court in CIT v/s Jet Airways Ltd. [2010] 195 Taxmann 177 (Bom.). It was contended by the learned Counsel that the learned Commissioner also cannot revise the assessment on other issues and cannot do something which the Assessing Officer cannot do so. The learned Counsel for the assessee further contented that the time limit for initiating show cause notice under section 263 of the Act would run from the date of intimation order dated 07/06/2018, which was passed under section 143(1) of the Act and not from the date of re-assessment order passed under section 143(3) r/w s....
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....During assessment proceedings pursuant to reopening of assessment u/s 148/147, the learned AO had issued show cause notice u/s 142(1) dated 10/12/2021 alongwith questionnaire (Copy of notice is enclosed at Pages 68- 71 of Factual Paperbook (Additional). 1.2 The assessee had filed its written submission on 01/03/2022 alongwith necessary documentary evidences (Refer Pages 1-67 of Factual Paperbook (Additional). 1.3 Therefore, the assessee submits that, enquiry was made in line with reasons recorded and the learned AO had taken a possible view on the issues involved. Thus, learned AO being satisfied with the written submission and documents filed, finalised the assessment by accepting the returned income. Hence, the order cannot be termed as erroneous and prejudicial to the interests of revenue, for lack of enquiry. 2. No minimal enquiry carried out by learned CIT before forming a view that the impugned order was erroneous and prejudicial to the interests of the Revenue. 2.1 The assessee submits that, it had filed detailed written submissions before learned CIT from time to time (Refer Pages 6-28 of Factual Paperbook). The assessee had demonstrated before learned CIT that, a....
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....ment agreement executed on 31/08/2015, is enclosed as Factual Paper Book pages 8-22 2. Stamp Duty & registration charges 76,97,777 3. Advocate Fees 15,000 Copy of Invoice is enclosed as Factual Paper Book Page-23 4. NMC building construction development fees 2,29,04,812 Copy of bank statement extract is enclosed as Factual Paper Book Page-28 5. Maharashtra State Welfare Board 5,89,464 Copy of receipt is enclosed as Factual Paper Book Page-24 6. Total 15,64,07,053 3.3 In view of above, it is evident that, valuation of cost of free construction to the owner as per ready reckoner as mentioned in the agreement of Rs. 2,81,33,000/- is not included in work-in-progress amounting to Rs. 15,64,07,053. Therefore, said expenditure has not been included in WIP of project and as such WIP to extent of Rs. 2,81,33,000/- is not required to be reduced. Issue: Disallowance u/s 40(a)(ia) of the Act for non-deduction of TDS 3.4 The assessee submits that, it had deducted TDS at the rate of one percent amounting to Rs. 12,52,000/- on sale consideration of Rs. 12,52,00,000/-. The assessee has duly paid the TDS amount of Rs. 12,52,000. The assessee had duly issued TD....
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....egal paperbook) Aishwarya Rai Bachchan v. PCIT [2022] 135 taxmann.com 335 (Mumbai Trib.) (Refer Pages 78 to 83 of legal paperbook) 4.2 Thus, once the learned AO cannot reassess any other issue without recording corresponding reasons & issuing separate 148 notice, the learned CIT also cannot revise the assessment on other issues. The learned CIT cannot do something which the learned AO cannot do. 5. Ground of Appeal No.3 Whether where jurisdiction under section 263 was sought to be exercised with reference to issues which were not subject of reopening of assessment, period of limitation provided in section 263(2) would commence from date of order of assessment u/s 143(1) and not from date on which order of reassessment u/s 147 had been passed. 5.1 Chronology of events Sr. no. Particulars Amount (Rs. ) 1. Order passed u/s 143(1) 07/06/2018 2. Order passed u/s 147 29/03/2022 3. Order passed u/s 263 29/03/2024 5.2 Issues as per reasons recorded (Refer Pages 1 to 3 of factual paperbook) [Relevant Extract]: "REASONS FOR REOPENING OF ASSESSMENT IN THE CASE OF M/s Latitude Infraventures (AAEFL9303P) FOR THE A.Y. 2016-17 U/s 147 OF THE INCOME TAX ACT, 1961. The....
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.... legal paperbook) * M/s Jainsons Agrochem Industries v. PCIT Writ petition no. 2136/2024 High Court of Rajasthan at Jodhpur (Refer Pages 29 to 38 of legal paperbook) * Indira Industries v. PCIT [2018] 95 Taxmann.com 103 (Madras) High Court of Madras. (Refer Pages 41 to 46 of legal paperbook) * Indira Industries v. PCIT [2018] 95 Taxmann.com 292 (Madras) High Court of Madras. (Refer Pages 47 to 51 of legal paperbook) * CIT v. Bharti Airtel Ltd. [2013] 37 Taxmann.com 218 (Delhi) High Court of Delhi (Refer Pages 52 to 53 of legal paperbook) * CIT v. Industrial Development Bank of India Ltd. [2023] 152 Taxmann.com 591 (SC) Supreme Court of India (Refer Pages 54 to 55 of legal paperbook) * CIT v. Alagendran Finance Ltd. [2007] 162 Taxmann.com 465 (SC) (Refer Pages 56 to 67 of legal paperbook) * Zulu Merchandise Pvt. Ltd. Vs. PCIT-2 I.T.A. No. 380/KOL/2023 [2023] (9) TMI 27-ITAT Kolkata (Refer Pages 68 to 77 of legal paperbook) * M/s Seyad Shairat Finance Ltd. vs. PCIT I.T.A No. 979/Chny/2020 [2021] (9) TMI 920-ITA Chennai (Refer Pages 84 to 91 of legal paperbook)." 7. The learned Departmental Representative supported the impugned order passed under section 263 of the Ac....
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....s made payment of Rs. 15,33,33,000/-, the source of payment is not explained viz a viz income shown in the ITR for previous years. Therefore, income for A.Y. 2016-17 has escaped assessment. In the view of the above, I have reasons to believe that the income to the tune of Rs. 15,33,33,000/- has escaped the assessment for A.Y. 2016-17." 10. Further, the issues on which the order was revised by the learned Commissioner as per the impugned order passed under section 263 is reproduced as under:- "7 Accordingly, I hereby set aside the assessment u/s 147 read with section 144 read with section 144B of the Income-tax Act, 1961 dated 29.03.2022 passed by the National Faceless Assessment Centre, to the AO, with a direction to the AO to make the assessment, by conducting inquiries and verification of the claim of the assessee after giving an opportunity of being heard, on the limited issue of: (i) examination of the cost of free construction of Rs. 2,81,33,000/- included in the Work-in-progress of Rs. 15,64,07,053/- shown in the P&L account. (iv) verification of disallowance u/s 40a(ia) of the Act." 11. We find that the issues on which re-assessment order was passed under section 1....
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.... to do so, a fresh notice under section 148 would be necessary, legality of which would be tested in event of a challenge by assessee - Held, yes CIT v. Usha Maritn Ventures Ltd. [2023] 150 Taxmann.com 491(Calcutta) High Court of Calcutta, wherein it has been held s under: "4. The short issue involved in the instant case is whether the Commissioner of Income-tax (Appeals) [CIT(A)] could have assumed jurisdiction under section 263 of the Act on an issue which was never the subject-matter of the assessment in a proceeding initiated under section 147 of the Act. On facts, the learned Tribunal found that the issue of loss/expenditure incurred in respect of newly undertaken software product development project as capital loss/expenditure was not touched by the assessing officer in the reassessment proceedings under section 147 of the Act. Therefore, the learned Tribunal found that the CIT(A) was not justified in invoking the provisions of section 263 of the Act on an issue which was not the subject-matter of the reassessment of the proceedings. The decision rendered by the Tribunal takes note of the correct legal position and, therefore, does not call for any interference." 12. The....
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....t be said to have overridden the law as interpreted by the Hon'ble Courts, according to which the Pr.CIT has to conduct an enquiry and verification to establish and show that the assessment order is wholly unsustainable in law. 6. The appellant craves leave to alter, amend, modify or substitute any ground/grounds and to add any new ground or grounds on or before the appeal is disposed off." 16. After haring both the parties and on a perusal of the material available on record, we find that similar issues have been raised by the assessee in its appeal being ITA no.349/Nag./2024, for the assessment year 2016-17, wherein, vide ground no.2, we have decided this issue on merit in favour of the assessee and against the Revenue vide Para-8 to 12, of this order. Since the issues rose in ground no.2, for our adjudication being identical, except variation in figures and differing reasons for re-opening vis-a-vis grounds for revision, consistent with the view taken therein in assessee's own case cited supra and respectfully following the findings given therein, we set aside the impugned order passed by the learned Principal Commissioner and allow the ground no.2, raised by the assessee....