Shri Ramesh Chander Singla v. Commissioner Of Income Tax (Appeals), Karnal And Another

of 2005 *** IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH Income-tax Appeal No. 284of 2005 Date of decision: 14.10.2010 Shri Ramesh Chander Singla ...Appellant Versus Commissioner of Income Tax (Appeals), Karnal and another ...Respondents CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY KUMAR MITTAL Present: Mr.Akshay Bhan, Advocate for the appellant. Mr.Sanjiv Kaushik, Advocate for the respondents. **** ADARSH KUMAR GOEL, J (Oral). 1.This order will dispose of ITA Nos.284, 285, 286, 287 and288 of 2005 as common question relating to the validity of re-assessment is involved. 2.In ITA No.284 of 2005, the assessee has raised followingquestions of law:- “i)Whether in the facts and circumstances of thepresent case the action of the authorities below ininitiating proceedings under section 147/148 of theAct in the absence of any new ground or reasonablecause, is legally sustainable in the eyes of law?ii)Whether in the facts and circumstances of thepresent case the action of the authorities below in holding proceedings under section 143(1)(a) of theAct not to be assessment proceeding is legallysustainable in the eyes of law? iii)Whether in the facts and circumstances of thepresent case the action of the authorities below ininitiating reassessment proceedings under section147/148 of the Act on mere change of opinion, islegally sustainable in the eyes of law?” 3.The assessee is a Development Officer of the LIC andclaimed deduction on incentive bonus and additional conveyanceallowance received by him. Return of the assessee was processedthereby benefit of deduction was taken by the assessee. In the lightof the judgment of this Court in C.I.T. Vs. B.M.Parmar(1999) 235ITR 679 holding that the assessee was to be governed by the headof salary, he could not get deduction by treating income under thehead of 'business' income, proceedings for re-assessment wereinitiated. The re-assessment was upheld by the CIT(A) and theTribunal. The Tribunal observed:- “2.10Now we proceed to decide the next issue asto whether in the existing facts and circumstances of thecases of the assessee, the reopening of the assessmentsby the Assessing Officer under section 147/148 of the Actand passing an order under section 143(3) of the Act isvalid or not. In the instant cases, the assessment for therelevant assessment year was reopened by theAssessing Officer under section 143(1) (a) admitting theclaim of the assessee in respect of incentive bonus and additional conveyance allowance. Later on, afterreopening the assessment, the Assessing Officerdisallowed the claim of rebate from incentive bonus andadditional conveyance allowance in excess of the certifiedamount by the DDO of LIC of India, by placing reliance onthe decisions of the jurisdictional High Court of Punjaband Haryana delivered in the cases of CIT V. B.M.Parmar reported in 235 ITR 679; in the case of CIT V.H.S.Sandhu reported in 237 ITR 167 and in the case ofCIT V. Chaman Lal Chandok reported in 241 ITR 442. additional conveyance allowance. Later on, afterreopening the assessment, the Assessing Officerdisallowed the claim of rebate from incentive bonus andadditional conveyance allowance in excess of the certifiedamount by the DDO of LIC of India, by placing reliance onthe decisions of the jurisdictional High Court of Punjaband Haryana delivered in the cases of CIT V. B.M.Parmar reported in 235 ITR 679; in the case of CIT V.H.S.Sandhu reported in 237 ITR 167 and in the case ofCIT V. Chaman Lal Chandok reported in 241 ITR 442. 2.11 Upon reading of section 147 of the Act, we find thatin view of the explanation 2(c)(i) wherein it has beenclearly mentioned that where the income chargeable totax has been under-assessed, it will be deemed to be acase where income chargeable to tax has escapedassessment. In the instant cases, this fact that incomechargeable to tax has escaped assessment, came to theknowledge of the Assessing Officer when thejurisdictional High Court of Punjab and Haryana in thecases (supra) held that the incentive bonus is assessableunder the head 'salary' and not under the head 'profitsand gains of business or profession' and therefore,deduction under section 16(i) of the Act is admissibleunder the head 'salary' and no separate deduction onaccount of expenditure is permissible and that deductionclaimed by the Development Officer of LIC of India inrespect of the additional conveyance allowance is onlyallowable to the assessee to the extent of the amountcertified, to have been incurred by the DevelopmentOfficer in discharge of his duties, by the DDO of LIC ofIndia. These decisions of the jurisdictional High Court ofPunjab and Haryana were binding on the AssessingOfficer and were the law for the Assessing Officer working under the jurisdiction of Punjab and Haryana. Itwas this knowledge and information which lead to theformation of the belief of the Assessing Officer that theincome of the assessee has been under-assessed and soas per explanation 2(c)(i) of section 147 of the Act, theincome of the assessee has escaped assessment andhence we are of the opinion that as per provisions ofsection 147/148 of the Act, the assessment reopened bythe Assessing Officer and the additions made by framingthe assessment under section 147 read with section 143(3) was valid and legal as it was based on the decisions(supra) of the jurisdictional High Court of Punjab andHaryana on the basis of which the claim already allowedby the Assessing Officer under section 143(1)(a) of theAct was required to be disallowed by the AssessingOfficer by reopening the assessment under section 147and passing an order under section 147 read with section143 (3) of the Act.” 4.We have heard learned counsel for the parties. 5.Learned counsel for the assessee is unable to dispute that in view of the judgment of this Court inPunjab Tractors Ltd. Vs. Joint Commissioner of Income-tax(2002) 254 ITR 242 (P&H)issuance of notice under Section 147 of the Income Tax Act, 1961could not be challenged on the ground that the original assessmentwas not made under Section 143(3) of the Act.Questions raisedhave thus to be decided against the assessee. 6.Further question raised in respect of assessment years1994-95 to 1996-97 is that proceedings for re-assessment werebarred by limitation under Section 149 of the Act. We find that *** neither before the CIT(A) nor before the Tribunal this plea was urged. The question raised does not arise from the order of the Tribunal.The same cannot be held to be a substantial question of law. 7.Accordingly, these appeals are dismissed. (Adarsh Kumar Goel) Judge October 14,2010Pka (Ajay Kumar Mittal) Judge