Commissioner Of Income Tax,Chennai v. M/S.saber Office & Schoolproducts Pvt. Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 10.08.2021 CORAM : The Honourable Mr.Justice T.S.SIVAGNANAMand The Honourable Ms.Justice SATHI KUMAR SUKUMARA KURUP Tax Case Appeal No.845 of 2015 Commissioner of Income Tax,Chennai. ...Appellant Vs M/s.Saber Office & SchoolProducts Pvt. Ltd.,No.7 A, 2[nd] Main Road,IIT Colony, Narayanpuram,Pallikaranai, Chennai – 600 100. ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 againstthe order dated 08.04.2015 made in ITA.No.512/Mds/2014 on thefile of the Income Tax Appellate Tribunal, 'D' Bench, Chennaifor the assessment year 2005-2006. The against the order Passed by the Deputy Commissioner ofIncome Tax, (Appeals)-VI ,Chennai-34. Dated 30/12/2013 ITANo.1342/13-14/A-VI For the assesment year 2005-2006. The against the order Passed by the Deputy Commissioner ofIncome Tax, Company Circle-VI (1),Chennai in PAN No. .dated 31/01/2013. For the assesment year 2005-2006. For Respondent : Mr.N.Quadir Hoseyn JUDGMENT This appeal by the revenue under Section 260A of the IncomeTax Act, 1961 ['the Act' for brevity] is directed against theorder dated 08.04.2015 passed by the Income Tax AppellateTribunal [hereinafter referred to as “the Tribunal”], 'D' Bench https://hcservices.ecourts.gov.in/hcservices/ in I.T.A.No.512/Mds/2014 for the assessment year 2005-2006. 2.The appeal was admitted on 29.09.2015 on the followingsubstantial question of law: “Whether on the facts and in thecircumstances of the case, the Tribunalw as rightin holding that the reassessment proceeding is badin law even though the assessment proceedingsunder Section 143(3) was passed merely acceptingthe return of the assessee without dealing with theissue of addition made in the re-assessmentproceedings?” 3.We have heard Mr.J.Narayanasamy, learned senior standingcounsel appearing for the appellant/revenue and Mr.QuadirHoseyn, learned counsel appearing for the respondent/assessee. https://hcservices.ecourts.gov.in/hcservices/ in I.T.A.No.512/Mds/2014 for the assessment year 2005-2006. 2.The appeal was admitted on 29.09.2015 on the followingsubstantial question of law: “Whether on the facts and in thecircumstances of the case, the Tribunalw as rightin holding that the reassessment proceeding is badin law even though the assessment proceedingsunder Section 143(3) was passed merely acceptingthe return of the assessee without dealing with theissue of addition made in the re-assessmentproceedings?” 3.We have heard Mr.J.Narayanasamy, learned senior standingcounsel appearing for the appellant/revenue and Mr.QuadirHoseyn, learned counsel appearing for the respondent/assessee. 4.The issue involved in this appeal is whether thereopening of assessment for the year under consideration AY2005-2006 which was done after a period of four years was validor not. The Commissioner of Income Tax [Appeals][CIT(A)] upheldthe validity of the reopening on the ground that in the originalassessment made under Section 143(3) of the Act, the AssessingOfficer has not formed any opinion on the issue which was thereason for reopening, namely, that the deferred revenueexpenditure can be claimed only under Section 35 and Section35DDA of the Act. The order passed by the CIT(A) was challengedby the assessee before the Tribunal and before the Tribunal, theassessee was able to establish that various details were calledfor by the Assessing Officer before completing the assessmentunder Section 143(3) of the Act and in this regard, referred toa communication sent by the Assessing Officer dated 20.08.2007.Further, the issue which was cited as a reason for reopening isquery No.28 in the query raised by the Assessing Officer videletter dated 20.08.2007. The assessee has explained in detailbefore the Assessing Officer the nature of the deferred revenueexpenditure as being advertisement expenditure for promotion ofits brand and it has chosen to right off such expenditure.Further the assessee has brought to the notice of the AssessingOfficer that in the Notes on Accounts in para 1(a) all therelevant details were mentioned which was perused by theAssessing Officer and having been satisfied the assessment wascompleted under Section 143(3) of the Act. Furthermore, theassessee has disclosed in its Profit and Loss account ScheduleXII, Balance Sheet of Schedule VII and Notes on Accounts para 1(a) to the final accounts. Furthermore, the auditor's reportalso mentions about the same. Thus the Tribunal was right inholding that the assessee had made full and true disclosure ofall relevant materials at the time of assessment and to reopenthe assessment on the ground that the Assessing Officer did notconsider various points raised by the assessee has been found to be factually incorrect. Thus, we find that there is no error inthe approach of the Tribunal nor the ultimate relief granted tothe assessee. 5.In the result, the tax case appeal is dismissed and thesubstantial question of law is answered against the revenue. Nocosts. Sd/- Assistant Registrar(CS IV) //True Copy// Sub Assistant Registrar +1cc to Mr.N.Quadir Hoseyn, Advocate, S.R.No.39504 +1cc to Mr.J.Narayansasamy, Advocate, S.R.No.39590 TCA.No.845 of 2015 RQN(CO)CT/06/09/2021