Principal Commissioner Of Incometax, Kolkata-3, Kolkata v. M/S. West Bengal Essentialcommodities Supply Corporationlimited, Kolkata

ITAT/426/2016IA No.GA/1/2017 (Old No.GA/36/2017) IN THE HIGH COURT AT CALCUTTA Special Jurisdiction (Income Tax)ORIGINAL SIDE PRINCIPAL COMMISSIONER OF INCOMETAX, KOLKATA-3, KOLKATA -Versus- M/S. WEST BENGAL ESSENTIALCOMMODITIES SUPPLY CORPORATIONLIMITED, KOLKATA Appearance:Mr. Om Narayan Rai, Adv....for the appellant. BEFORE: The Hon’ble JUSTICE T.S. SIVAGNANAM -And- The Hon’ble JUSTICE BIVAS PATTANAYAK The Court : This appeal filed by the revenue underSection 260A of the Income Tax Act, 1961 (the ‘Act’ for brevity)is directed against the order dated 8[th] June, 2016 passed by theIncome Tax Appellate Tribunal, B” Bench, Kolkata in ITA No.909/Kol/2013 for the assessment years 2005-06. The revenue has raised the following substantiali) Whether on the facts and in the circumstances ofthe case the learned Income Tax AppellateTribunal, “B” Bench, Kolkata erred in law in questions of law for consideration: holding that the reassessment proceedingsinitiated under Section 147 of the Income Tax Act,1961 to be illegal and consequently cancelled theorder passed under Section 147 of the Income taxAct ?ii)Whether on the facts and in the circumstances ofthe case the learned Income Tax AppellateTribunal, “B” Bench, Kolkata erred in law inholding that this is a case of change of opinion,whereas it appears from the record that the issueon which initial proceedings under Section 147 ofIncome Tax Act, 1961 has been initiated hasneither been examined by the assessing officer atthe time of initial assessment under Section143(3)/147 of Income Tax Act, 1961 nor the detailsof such expenses has been filed by the assesseesince the reason for issuing initial Notice underSection 148 of the Income Tax Act, 1961 was for nofiling of return under Section 139 of Income TaxAct, 1961 ? We have heard Mr. Om Narayan Rai, learned standingcounsel for the appellant/revenue. The short question which falls for consideration iswhether the reopening of the assessment was valid and the tribunalwas correct in setting aside the order passed by the Commissionerof Income Tax (Appeals) – VIII, Kolkata (CIT(A) dated 25[th]February, 2013 by which the CIT(A) affirmed the ex parte order ofassessment dated 30[th] December, 2011 passed by the assessing officer under Sections 147, 144 and 143(3) of the Act.Admittedly, the assessment was reopened after a period of fouryears. If that is so, the power under Section 147 could have beeninvoked where income chargeable to tax has escaped assessment forsuch assessment year by reason of failure on the part of theassessee to disclose truly and fully all material facts necessaryfor the assessment. If in the absence of any such finding by theassessing officer, the reopening of the assessment has to be heldnot sustainable. The tribunal after considering the facts whichwere placed before it has recorded a finding that the assessingofficer does not spell out that escapement of income was due tothe assessee not fully and truly disclosing all material factsnecessary for completion of the assessment. However, on perusalof the reasons mentioned by the assessing officer, the tribunalfound that there is no specific finding to the effect that therewas failure on the part of the assessee to fully and trulydisclose all material facts. Furthermore, the tribunal also notedthat even during the original proceedings before the assessingofficer, at the first instance, increase in freight charges vis-à-vis purchases were very much available before the assessingofficer. Further, the learned tribunal took note of the decisionin CIT vs. Kelvinator of India Ltd. reported in 320 ITR 561 (SC)and applied the said decision to the facts of the case and heldthat the assessing officer does not refer to any new material that came into his possession based on which he entertained to believethat income of the assessee chargeable to tax has escapedassessment. Further, the nature of activities done by theassessee was taken note of and that it was a Government of WestBengal company. After examining the facts, the tribunal hasconcluded that the initiation of reassessment proceeding wasmerely on the basis of change of opinion. Thus, we find that thefactual position having been taken note of by the tribunal, reliefwas granted to the assessee. Thus, we are of the view that no question of law muchless substantial question of law arises for consideration in thisappeal. According, the appeal (ITAT/426/2016) fails and isdismissed. Consequently, the connected application for stay(GA/1/2017) also stands closed. (T.S. SIVAGNANAM, J.) (BIVAS PATTANAYAK, J.) S.Das/A.SadhukhanAR(CR)