M/S. Kumar Traders v. Assistant Commissioner Of Income Tax

IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE ITAT/25/2015IA No:GA/1/2015 (Old No.:GA/534/2015) M/S. KUMAR TRADERS VERSUSASSISTANT COMMISSIONER OF INCOME TAX ITAT/26/2015IA No:GA/1/2015 (Old No.:GA/537/2015) M/S. R. R. SONS TRADING VERSUSASSISTANT COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE-XVI, KOLKATA ITAT/28/2015IA No:GA/1/2015 (Old No.:GA/532/2015)M/S. HIGAIN CONSULTANCY SERVICES (P) LTD.VERSUSASSISTANT COMMISSIONER OF INCOME TAX, ITAT/30/2015IA No:GA/1/2015 (Old No.:GA/538/2015)M/S. SUNIL FAN INDUSTRIESVERSUSINCOME TAX OFFICER, WARD-35(2), KOLKATA ITAT/31/2015IA No:GA/1/2015 (Old No.:GA/531/2015)M/S. S. A. ENGINEERING WORKSVERSUSASSISTANT COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE-XVI, KOLKATA ITAT/33/2015 IA No:GA/1/2015 (Old No.:GA/533/2015) M/S. RAMESHAR LAL SAJJAN KUMAR (PRESENTLY VINSA ELECTRICAL P)VERSUS ASSISTANT COMMISSIONER OF INCOME TAX ITAT/34/2015 IA No:GA/1/2015 (Old No.:GA/530/2015)M/S. DHRUVIYA INTERNATIONAL LIMITEDVERSUSASSISTANT COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE-XVI, KOLKATA ITAT/35/2015 IA No:GA/1/2015 (Old No.:GA/528/2015)M/S. MAYUR VYAPAR PVT. LTD.VERSUS ASSISTANT COMMISSIONER OF INCOME TAX ITAT/27/2015IA No:GA/1/2015 (Old No.:GA/539/2015)M/S. LEOPARD FINANCIERS PVT. LTD.VERSUSASSISTANT COMMISSIONER OF INCOME TAX, BEFORE : THE HON’BLE JUSTICE T.S. SIVAGNANAM AndTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYADate : 10th May, 2022. Appearance:- Ms. Chandrani Das, Adv. Ms. Riti Basu, Adv. …for Appellant The Court : These appeals have been preferred by the assesseesunder Section 260A of the Income Tax Act, 1961 challenging the commonorder passed by the Income Tax Appellate Tribunal “A” Bench, Kolkata,dated 12[th] September, 2014. The appeals before the Tribunal, though filedby different assessees, involved common issues, the Tribunal took up forconsideration the appeals together and disposed of by the commonimpugned order. The assessment year in all the appeals is 1999-00. The assessees have raised the following substantial questions oflaw for consideration :- I)Whether on the facts and in the circumstances of the case theimpugned order of the tribunal dated 12[th] September, 2014 waserroneous in so far as it upheld the initiation of reassessmentproceedings for assessment year 1999-2000?impugned order of the tribunal dated 12[th] September, 2014 waserroneous in so far as it upheld the initiation of reassessmentproceedings for assessment year 1999-2000? II)Whether on the facts and in the circumstances of the case theimpugned order of the Tribunal dated 12[th] September, 2014was perverse in so far as it ignored the most relevant conditionthat initiation of reassessment proceeding was a clear case ofchange of opinion when the materials contained in the recordedreasons where already available with the department muchbefore and also at the time of making the original assessmentunder section 143(3)?impugned order of the Tribunal dated 12[th] September, 2014was perverse in so far as it ignored the most relevant conditionthat initiation of reassessment proceeding was a clear case ofchange of opinion when the materials contained in the recordedreasons where already available with the department muchbefore and also at the time of making the original assessmentunder section 143(3)? III)Whether, on the facts and in the circumstances of the case, theorder of the Tribunal was clearly erroneous in law and perversein deciding the case on the basis of a judicial decision in thecase of Re: Income Tax Officer -Vs- Purushottam Das Bangurwhere the reopening was based on information receivedsubsequent to the passing of the assessment reopened asagainst the present case where reopening was made on thebasis of information already available before the framing oforiginal assessment?order of the Tribunal was clearly erroneous in law and perversein deciding the case on the basis of a judicial decision in thecase of Re: Income Tax Officer -Vs- Purushottam Das Bangurwhere the reopening was based on information receivedsubsequent to the passing of the assessment reopened asagainst the present case where reopening was made on thebasis of information already available before the framing oforiginal assessment? The learned Advocate appearing for the appellant/assessee submittedthat earnest efforts were taken by them to intimate their clients about thepresent appeals not only recently but much earlier also. However, theclients have not responded to any of their communication either. In orderto substantiate the same, the learned Advocate appearing for the appellanthas produced the copies of the email communications sent to the appellantson several dates. Therefore, the learned Advocate reported ‘no instruction’.The said submission is taken on record. Since the appellants have not responded to the repeatedcommunications sent by the learned Advocate for the appellant, it appearsthat appellants are not interested in prosecuting the matter. Nevertheless,since the matter is of the year 2015 challenging the order passed by theTribunal dated 12[th] September 2014, we have taken up the matters forconsideration on merits. The common issue involved in all these appeals iswhether the reopening of the assessment is valid and proper. Theassessments under Section 147, read with Section 143(3), were put tochallenge by the appellants before the Commissioner of Income Tax(Appeals) – Central II, Kolkata [CIT(A)] and all the appeals were dismissed.Challenging the same the assessees preferred appeals before the Tribunal.The Tribunal after considering the factual position noted that before theCIT(A) the assessee had raised the three issues namely, i) the issue relatingto the validity of the reopening proceedings, ii) the initiation of reassessmentproceedings being barred by limitation, and iii) with regard to service ofnotice under Section 143(2) of the Act. The learned Tribunal noted that the present litigation was a secondround of litigation and the issue pertaining to service of notice underSection 143(2) of the Act was decided against the assessee in the first roundof litigation and the said order had attained finality as the assessee had notpreferred any appeal against such a finding. Therefore, the said issue wasdecided against the assessee. With regard to the remaining two issuesnamely, the validity of initiation of the proceedings for reassessment and asto whether the reassessment proceedings were barred by limitation, theTribunal examined the facts and upheld the finding rendered by the CIT(A)in the following terms:- The learned Tribunal noted that the present litigation was a secondround of litigation and the issue pertaining to service of notice underSection 143(2) of the Act was decided against the assessee in the first roundof litigation and the said order had attained finality as the assessee had notpreferred any appeal against such a finding. Therefore, the said issue wasdecided against the assessee. With regard to the remaining two issuesnamely, the validity of initiation of the proceedings for reassessment and asto whether the reassessment proceedings were barred by limitation, theTribunal examined the facts and upheld the finding rendered by the CIT(A)in the following terms:- “6.4. We further noted that before the CIT (A), the Assessee has takenthree legal issues; one issue relates to the validity of the initiation of theproceedings, second issue relates to the initiation of re-assessmentproceedings barred by limitation and the third issue relates to theservice of the notice u/s. 143(2). In the second round of appeal, CIT(A),when the proceedings got reinstated before him, had decided the issuein respect of issuance and service of notice u/s 143(2) against theAssessee. Against that issue, the Assessee has not filed any appeal orcross objection before us. Therefore, that issue got concluded by theorder of CIT(A) and we cannot adjudicatte that issue. Even during thecourse of the argument also, the ld. AR did not raise any such issueeven though the issue involved, in our opinion, is a legal issue. Wenoted that in respect of validity of the proceedings, the Assessee raisedtwo issues before CIT(A); one relating to issue that the proceedings initiated u/s 143(3) are barred by limitation as notice u/s 148 wasissued after expiry of 4 years and other issue is that there are no‘reasons to believe’ and the material available was already before the AO.The CIT(A), we noted, has not given any finding in respect of the issuetaken by the Assessee that initiation of the proceedings are barred bylimitation in view of proviso to Sec. 147 but the CIT(A) decided in favourof the Assessee on the issue that the same information was availablewith the AO even during the original assessment by observing as under: “4.4 The facts of the present case clearly show that an AssessingOfficer who has a proper understanding of Income Tax Act cannot holda belief that the loan or capital credited in the books of account duringthe year under appeal is not genuine on the basis of information aboutsome unspecified loan or capital of preceding years. In fact the sameinformation was available with the Assessing Officer even during theoriginal assessment year and at that time this information was notconsidered to be sufficient to hold that the loan or capital creditedduring the year could be non genuine. The above mentioned decision ofHon’ble Supreme Court is applicable in the present case and therefore Ihold that the notice issued by Assessing Officer u/s 148 was invalidand therefore the reassessment order of the Assessing Officer isannulled”Officer who has a proper understanding of Income Tax Act cannot holda belief that the loan or capital credited in the books of account duringthe year under appeal is not genuine on the basis of information aboutsome unspecified loan or capital of preceding years. In fact the sameinformation was available with the Assessing Officer even during theoriginal assessment year and at that time this information was notconsidered to be sufficient to hold that the loan or capital creditedduring the year could be non genuine. The above mentioned decision ofHon’ble Supreme Court is applicable in the present case and therefore Ihold that the notice issued by Assessing Officer u/s 148 was invalidand therefore the reassessment order of the Assessing Officer isannulled” 6.5 The Assessee has not filed any appeal or cross objection beforeus. Now, the only issue with which is vested with us for adjudication iswhether the AO has ‘reason to believe’ on the basis of the informationavailable with him. Whether the reasons to believe recorded by theassessing officer are bonafide or not, initiated on the basis of thestatement of one of the partner of the assessee at the time of search andseizure." After rendering the above finding the Tribunal examined as towhether the assessee was justified in contending that the reassessmentproceeding was a case of change of opinion. We find from the order passedby the learned Tribunal all the decisions on the point have been noted andelaborate reasons have been given affirming the factual finding recorded bythe CIT(A). Wherever the finding was rendered by the CIT (A) in favour of theassessee was also examined and ultimately the reassessment proceedingswere held to be valid on facts. Taking note of the elaborate reasons given bythe Tribunal, we find no question of law, much less substantial questions oflaw, arising for consideration in these appeals. Accordingly, the appeals aredismissed. With the dismissal of the appeals, all connected applications alsostand dismissed. Since the revenue has not been represented by the Counsel in theseappeals, we direct Mr. Vipul Kundalia learned Senior Standing Counsel andMr. Prithu Dudheria, learned Junior Standing Counsel to accept notice onbehalf of the respondent and the Ministry of Law and Justice shallregularise their appearance. Since the appeal being ITAT 27 of 2015 appearing in thesupplementary list today is filed challenging the common order passed bythe Income Tax Appellate Tribunal “A” Bench, Kolkata, dated 12[th]September, 2014 and the issue involved was a common one, the same is taken up with the above appeals and stands dismissed with the aboveobservation. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.) SN/GH.AR(CR)