TMI Blog2017 (3) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... vailable on record while concluding the assessment proceedings u/s 143(3) of the Act and merely on the change of opinion on the same set of facts. Such action of the AO has been held to be illegal and not valid in law by the decisions referred to by the assessee before CIT(A). We, therefore, hold that the initiation of proceedings u/s 147 of the Act was not valid and therefore order of reassessment has to be annulled and is accordingly annulled. We are of the view that the contribution cannot be considered as prior period expenses in view of the specific provision of section 36(1)(iv) r.w.s. 43B and deduction on the basis of payment is permissible in law. We are of the view that order of CIT(A) in this regard does not call for any interference. - Decided against revenue - I.T.A No.1524/Kol/2013, C.O.No.99/Kol/2013 - - - Dated:- 1-3-2017 - Sri N.V.Vasudevan, JM and Shri Waseem Ahmed, AM For The Department : Shri Anand Kumar Sinha, JCIT For The Assessee : Shri Mayank Singhania, ACA ORDER Per N.V.Vasudevan, JM ITA No.1524/Kol/2013 is an appeal filed by the Revenue against the order dated 15.02.2013 of CIT(A)-XX, Kolkata relating to A.Y 2003-04. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 36,41,496/- has been charged against the revenue in the A.Y.2008-09. Again from item No.17(1) of 3CD report it is seen that in respect of superannuation fund, the company has filed a petition dt. 23.3.2003 from approval which was accorded under Rule 2(1) of Part B of the fourth Schedule to the I.T.Act w.e.f. 6.3.2003. In view of the above it is seen that contribution from 1st March, 1990 to March, 2001 is prior period expenses which is disallowable/not allowable expenditure. I, have, therefore, reason to believe that income chargeable to tax has escaped asstt. By ₹ 36,41,496/- within the meaning of section 147 of the Il.T.Act, and such escapement is attributable to the assessee who claimed inadmissible expenses. Notice u/s 148 is issued accordingly. 6. In response to the notice u/s 148 of the Act the assessee by letter dated 06.09.2006 requested the AO to treat the return filed on 01.12.2003 as return filed in response to the notice issued u/s 148 of the Act. 7. The assessee submitted before AO that the issue with regard to allowing deduction on account of contribution to employees Superannuation Fund was already examined in the proceedings u/s 143(3) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of CIT vs Kelvinator of India Ltd. 256 ITR 1 (Delhi)(FB) and also the CBDT Circular No.549 dated 31.10.1989 which explained the scope of section 147 and made it very clear that a mere change of opinion cannot form the basis for reopening a completed assessment. Attention was also drawn to the decision of the Hon ble Apex Court in the case of CIT vs Kelvinator of India Ltd. 320 ITR 561 (SC) wherein the decision of the Hon ble Delhi High Court in the case of Kelvinator of India ltd. (supra) was upheld. Reference was also made to the following decisions :- (i) Full Bench of the Hon ble Delhi High Court in the case CIT. -vs.- Usha International Ltd. (ITA No. 2026/2010) (Del) wherein it was held that the reassessment proceedings will be invalid in case an issue or query is raised and answered by the assessee in original assessment proceedings but thereafter the AO does not make any addition in the assessment order. The fact that the assessment order is silent will not be relevant in determining whether or not there is 'change of opinion' because the assessee cannot have any control over the way an order is written. (ii) Decision of the Hon'ble Mumbai ITAT in Third Mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Fourth Schedule to the Act. It was pointed out that the Assessee made payment of ₹ 36,41,396/- to Birla Sunlife Insurance Co. Ltd towards contribution to superannuation fund on 10-03-2003 vide cheque no. 906990 drawn on SBI. Copy of the above approval and the receipt evidencing payment of the same was also filed. Reference was also made to the provisions of Sec. 438 of the Act which are as under:- 43B. Certain deductions to be only on actual payment. Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of- (b) any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund or Gratuity fund or any other fund for the welfare of employees, or . . shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him: Provided that nothing contained in this section shall apply in relation to any sum whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . At the time of payment on 10-03-2003 to Birla Sunlife Insurance Company Ltd., there was no approval of the Superannuation Fund to which the contribution was made. The appellant argued that as per provision of section 36(1)(iv), the deduction for the amount of contribution to superannuation fund is allowable if the same is paid in the year under consideration. Further, the approval for the fund by the CIT vas given with effect from 06.03.2003 and the payment towards their contribution to superannuation fund to Birla Sunlife Insurance Co. Ltd. amounting to ₹ 36,41,396/- was made on 10.03.2003. As per section 43B, the same is allowable on payment basis. To support their argument, they relied upon various judgments of the Honble ITAT/High Courts. After careful consideration of the facts and circumstances of the case and also the various judgments cited by the appellant, I find merit in their argument, therefore, the appeal on this ground is allowed. 11. Aggrieved by the order of CIT(A) the revenue has preferred the present appeal before the Tribunal. Grounds of appeal raised by the revenue read as follows :- 1. That on the facts and in the circumstances of the case, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no tangible materials coming into the possession of the AO after conclusion of the assessment proceedings u/s 143(3) of the Act on the basis of which he formed a belief regarding escapement of income chargeable to tax. In other words, the AO has come to a different conclusion on the material already available on record while concluding the assessment proceedings u/s 143(3) of the Act and merely on the change of opinion on the same set of facts. Such action of the AO has been held to be illegal and not valid in law by the decisions referred to by the assessee before CIT(A). We, therefore, hold that the initiation of proceedings u/s 147 of the Act was not valid and therefore order of reassessment has to be annulled and is accordingly annulled. 15. As far as the merits of addition made by the AO which was deleted by CIT(A) is concerned, we are of the view that the conclusion of CIT(A)on this issue are correct and supported by the decision of the Hon ble Delhi High Court referred to in the submissions before CIT(A). We are of the view that the contribution cannot be considered as prior period expenses in view of the specific provision of section 36(1)(iv) r.w.s. 43B of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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