Andhonourable Mr.justice A.c. Rao v. Honourable Mr.justice A.c. Rao

C/TAXAP/135/2019 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 135 of 2019 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE J.B.PARDIWALA andHONOURABLE MR.JUSTICE A.C. RAO ==========================================================1 Whether Reporters of Local Papers may be allowed to see the judgment ?2 To be referred to the Reporter or not ?3 Whether their Lordships wish to see the fair copy of the judgment ?4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ?==========================================================ASST. COMMISSIONER OF INCOME TAX VersusKAPESH V. SHAH ==========================================================Appearance:MRS KALPANAK RAVAL(1046) for the Appellant(s) No. 1 for the Opponent(s) No. 1========================================================== CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR.JUSTICE A.C. RAO Date : 29/07/2019 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) This Tax Appeal under Section 260A of the Income Tax Act, 1961, is at the instance of the Revenue and is directed against the order passed by the Income Tax Appellate Tribunal, Ahmedabad dated 25/09/2018 in the ITA No.3446/ Ahd/2014/SRT for the A.Y.2007-08 . 2.The Revenue has proposed the following two substantial questions of law for the consideration of this Court : "(A) Whether on the facts and circumstances of the case and law Hon'ble ITAT has erred in setting aside reopening of assessment made by the AO under section 147 of the Act ? (B) Whether on the facts and circumstances of the case and law Hon'ble ITAT has erred in setting aside addtiion of Rs 1,92,000/- made by the AO under section 143(1) of the Act ? 3.The Appellate Tribunal, while allowing the appeal preferred by the assessee, observed as under : " 5. On careful consideration of above rival submissions, first of all, I may point out that the assessment in this case was finalized on 16.12.2009 under section 143(3) of the Act determining the total income of Rs 10,02,600/- by making a disallowance/addition of Rs 1,00,000/- under section 40(a) (ia) of the Act to the returned income. From the copy of the reasons recorded available at page 52 of the assessee's paper book, it is vivid that the reasons were recorded on 19.8.2011, wherein first two paras the AO recorded the history of earlier ass proceedings and in subsequent para 3 noted the essence of the provisions of section 40A(3) of the Act and thereafter in para 4 alleged that from the scrutiny of the record and submissions made by the AO, it is notices that the assessee had paid Rs 9,60,000/- in cash to Shri Suresh C. Desai which required to be disallowed under section 40 A(3) of the Act. Thereafter, in last para, the AO jumped to form a reason to believe that the income has escaped assessment therefore, notice under section 148 of the Act being issued within the meaning of section 147 of the Act." 3.Thus, the Tribunal has recorded a finding of fact that there was no good reason for the Assessing Officer to come to the conclusion that the income had escaped assessment. The finding of fact recorded by the Tribunal is that there was no new tangible material in the hands of the Assessing Officer at the time of initiating the reassessment proceedings under Section 147 of the Act and at the time of issuing the notice under Section 148 of the Act. 4.Having regard to the finding of fact recorded by the Appellate Tribunal, we are not inclined to disturb the order. None of the questions as proposed by the Revenue would be termed as substantial question of law involved in this Tax Appeal. 3.Thus, the Tribunal has recorded a finding of fact that there was no good reason for the Assessing Officer to come to the conclusion that the income had escaped assessment. The finding of fact recorded by the Tribunal is that there was no new tangible material in the hands of the Assessing Officer at the time of initiating the reassessment proceedings under Section 147 of the Act and at the time of issuing the notice under Section 148 of the Act. 4.Having regard to the finding of fact recorded by the Appellate Tribunal, we are not inclined to disturb the order. None of the questions as proposed by the Revenue would be termed as substantial question of law involved in this Tax Appeal. 5.In the result, this Appeal fails and is hereby dismissed. (J. B. PARDIWALA, J) (A. C. RAO, J)