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Smt. Mahinder Kaur Chhatwal, C/o. Kunar Aggarwal & Associates Versus The Income Tax Officer, Ward-2 (4) , Gurgaon

2017 (11) TMI 384 - ITAT DELHI

Initiation of re-assessment proceedings - non payment in respect of Government duty covered under section 43B - Held that:- A.O. passed the original assessment order under section 143(3) and did not make any addition under section 43B of the I.T. Act. Later on, A.O. found certain mistakes in the original assessment order dated 22nd December, 2011 and one of the mistake was that no proof of payment in respect of Government duty covered under section 43B have been filed which was to be added under .....

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ed to have been dropped under section 154. It, therefore, shows that A.O. accepted the explanation of assessee that assessee made proper payment under section 43B of the I.T. Act. There were no other material available on record to show that assessee has not made any payment covered under section 43B of the I.T. Act. On the face of the material available on record, it was not proper for the A.O. to initiate the re-assessment proceedings with regard to the same fact that assessee has not made pay .....

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3,92,168 was filed on 28th September, 2009. The assessment was completed vide order dated 22nd December, 2011 under section 143(3) of the I.T. Act at a total income of ₹ 5,09,670 by making certain disallowances of expenditure. Later on, it was noticed that assessee has not paid payable liability of ₹ 1,26,105 and TDS of ₹ 45,143 into Government account. The A.O. initiated the re-assessment proceedings under section 147 of the I.T. Act after recording the reasons on dated 31st .....

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ever, the appeal of assessee has been dismissed with the enhancement. 3. The assessee in the present appeal has challenged the initiation of re-assessment proceedings under section 147 of the I.T. Act and additions of ₹ 6,50,000, ₹ 4,19,585 made by the A.O. and also further challenged the additions enhanced by the Ld. CIT(A). 4. I have heard the Learned Representatives of both the parties and perused the material on record. The assessee filed an application for admission of the addit .....

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decide the same. Therefore, additional ground is admitted for hearing. 4.1. It is well settled law that validity of re-assessment proceedings is to be determined on the basis of the reasons recorded for reopening of the assessment. Copy of the reasons recorded for reopening of the assessment is filed at page 93 of the paper book which reads as under : Annexure Reasons for reopening the case u/s 147 of the Income Tax Act, 1961 Name & Address : Smt. Mohinder Kaur Chhatwal, of the assessee : 36 .....

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248/- have escaped assessment, I therefore, have been to believe that the assessee is in default for non-payment of Govt. liabilities and hence income to the tune of ₹ 1,71,248/- has escaped assessment. Sd/- Income Tax Officer, Ward-1(1) Gurgaon. 4.2. Originally, the assessment order under section 143(3) was passed vide order dated 22nd December, 2011. But the A.O. did not make any addition on account of duty under section 43B of the I.T. Act as considered in the reasons for reopening of t .....

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ied by assessee vide reply dated 11th March, 2014 copy of which is filed at page 82 of the paper book in which assessee submitted that he already deposited the TDS which is supported by copies of the challans which are also filed in the paper book. According to Learned Counsel for the Assessee, till recording of the reasons for reopening of the assessment on 31st March, 2014, the rectification under section 154 was pending which have not been disposed by A.O. He has further submitted that A.O. h .....

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ings is bad in law. The A.O. passed the original assessment order under section 143(3) of the I.T. Act and after examining the books of account and material on record, made various disallowances of the expenditure. The A.O. however, did not make any addition under section 43B of the I.T. Act. Later on, A.O. found certain mistakes in the original assessment order dated 22nd December, 2011 and one of the mistake was that no proof of payment in respect of Government duty covered under section 43B, .....

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December, 2011 and proposed action under section 154 would be deemed to have been dropped under section 154 of the I.T. Act. It, therefore, shows that A.O. accepted the explanation of assessee that assessee made proper payment under section 43B of the I.T. Act. There were no other material available on record to show that assessee has not made any payment covered under section 43B of the I.T. Act. On the face of the material available on record, it was not proper for the A.O. to initiate the re- .....

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did not make any addition in the re-assessment order dated 20th March, 2015 in respect of the issue under section 43B which was solely raised in the reasons recorded for reopening of the assessment. Thus, the entire exercise made by the A.O. is without jurisdiction and is not sustainable in Law. The Hon ble Karnataka High Court in the case of Berger Paints India Limited vs. ACIT 322 ITR 369 held that the reassessment notice had been issued for virtually the same reason for which rectification p .....

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