TMI Blog2004 (5) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... arned CIT(A) has erred in law and facts by upholding the additions of Rs. 70,468, Rs. 70,743, Rs. 1,06,037, Rs. 91,532, Rs. 82,764 for asst. yrs. 1994-95, 1995-96, 1996-97, 1997-98 and 1998-99 respectively made by the learned AO on account of incentive bonus taking it to be a part of salary and not income from business or other sources. 5. The learned CIT(A) has erred in law and facts by upholding the addition of Rs. 5,963, Rs. 70,743, Rs. 30,000 and Rs. 88,861 for asst. yrs. 1994-95, 1995-96, 1996-97 and 1998-99 respectively made by the learned AO on account of additional conveyance allowance under s. 10(14) of the IT Act. 2. The relevant and material facts for the disposal of the issue involved in these grounds of appeals are that the assessee is a Development Officer of LIC of India. He filed his returns of income for the asst. yrs. 1994-95 to 1998-99 and claimed rebate at the rate of 40 per cent from the incentive bonus received. He further claimed the entire additional conveyance allowance as exempt. The AO processed the return under s. 143(1)(a) and disallowed the rebate claimed from incentive bonus as well as the additional conveyance allowance in excess of what was ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der s. 143(3) of the Act in asst. yrs. 1996-97 to 1998-99, whereas the claim of rebate from the incentive bonus and the excess exemption claimed from the additional conveyance allowance was disallowed by the AO on agreed basis in the asst. yr. 1996-97. However, the additions were made in other two assessment year, i.e., 1997-98 and 1998-99 on merits. 2.3 Aggrieved with these orders passed by the AO, the assessee filed appeals before the CIT(A) and firstly raised the issue that the action of the AO under s. 147/148 of the Act was not warranted as there was no escapement of income but the assessment was reopened due to change of the opinion because no new information came to the knowledge of the AO; secondly that once the AO has already made the addition on the basis of the assessment was reopened, there cannot be any underassessment of income and so reopening of the assessment was neither justified nor legal; thirdly once the appellate proceedings against the order of the CIT(A) were pending before the Tribunal, so the AO was not justified in reopening the assessment during that period; and lastly he challenged the addition made by the AO under s. 143(3) of the Act on merits. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant year was completed vide intimation under s. 143(1) and even an appeal was filed thereagainst—Therefore, it cannot be said that assessment was not made—Intimation under s. 143(1) operates as an order of assessment unless the authority proceeds to give notice under s. 143(2) and passes an order under s. 143(3)—Impugned notice having been given almost a year before the date on which an order could be passed under s. 143(3), no prejudice has been caused to the petitioner—It is also not contended that the reasons for reopening were not relevant—Therefore, notice under s. 147/148 is not vitiated merely for the reason that a notice under s. 143(2) had not been issued to the petitioner." 2.5 Relying upon the following decisions: (i) Decision of apex Court in the case of ALA Firm vs. CIT (1991) 93 CTR (SC) 133 : (1991) 189 ITR 285 (SC); (ii) Decision of Andhra Pradesh High Court in the case of CIT vs. Novapan India Ltd. (2000) 158 CTR (AP) 590 : (1999) 236 ITR 746 (AP); (iii) Decision of Bombay High Court in the case of Kotumal Ghanshyamdas vs. CIT (1995) 127 CTR (Bom) 26 : (1995) 214 ITR 629 (Bom); the CIT(A) held that reopening made to implement the law as clarifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with the order of the CIT(A), the assessee is now in appeal before us. The assessee has filed written submissions and advanced oral arguments and conceded to the extent that as per the decision of the jurisdictional High Court of Punjab Haryana in the case of Punjab Tractors Ltd. vs. Jt. CIT, intimation under s. 143(1) operates as an order of assessment unless the authority proceeds to give notice under s. 143(2) and passes an order under s. 143(3). He further conceded in his written submissions that in the normal course, the processing under s. 143(1) may not be a bar to operation of s. 148 of the Act but the grievance of the assessee projected before us by the learned Authorised Representative for the assessee is on the issue that since the same items were already added to the returned income by the AO and the matter was pending before the Tribunal in appeal of the Revenue, as on the date of reopening of the assessment, so the items on the basis of which the opinion was formed by the AO, was neither hidden nor passed unnoticed and so it was not the case of escaped assessment and so reopening of the assessment by the AO was neither legal nor justified. 2.7 Learned Departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y given a finding in this order that the orders passed under s. 143(1)(a) of the Act by the AO or the orders passed by the CIT(A) reversing those orders of the AO or the pendency of the appeals against the orders of the CIT(A) before the Tribunal, is not a bar for deciding the claims of the assessee on merits by reopening the assessment under s. 147/148 of the Act by passing an order under s. 143(3) of the Act, after affording an opportunity of being heard to the assessee. 2.10 Now, we proceed to decide the next issue as to whether in the existing facts and circumstances of the cases of the assessee, the reopening of the assessments by the AO under s. 147/148 of the Act and passing an order under s. 143(3) of the Act is valid or not. In the instant case, the assessment for the relevant assessment year was reopened by the AO under s. 143(1)(a) admitting the claim of the assessee in respect of incentive bonus and additional conveyance allowance. Later on, after reopening the assessment, the AO disallowed the claim of rebate from incentive bonus and additional conveyance allowance in excess of the certified amount by the DDO of LIC of India, by placing reliance on the decisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
