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2017 (11) TMI 384

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 section 154 of I.T. Act to the income of the assessee. - The assessee filed reply before A.O. in the rectification proceedings under section 154 of the Act supported by copies of the challan to show that payment in question have been made to th .....

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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 March, 2014. The assessee submitted before A.O. that return originally filed may be treated as return having filed in response to the notice under section 148 of the I.T. Act. The A.O. after considering the explanation of assessee made two additions of ₹ 4,19,585 on account of expenditure and made further addition of ₹ 6,50,000 on account of unexplained bank deposits. The total income was computed at ₹ 15,79,255. The assessee challenged both the additions before Ld. CIT(A). How .....

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/1, East Punjabi Bagh, New Delhi. A.Y. : 2009-2010 PAN : ACQPC4929A Status : Indl. Date : 31.3.2014 Reasons : The assessee has not paid payable liability of ₹ 1,26,105/- u/s 43B. Hence the (1) The assessee has no proof of payment in respect of Govt, duty u/s 438 amounting to ₹ 1,26,105/- and TDS of ₹ 45,143/- was deducted but not deposit in Govt. account. Hence, the same have been omitted to be disallowed u/s 43B. In view above income of above to the tune of Rs.l,26,105/- 1,71,248/- 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) Gurgao .....

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herefore, initiation of re-assessment proceedings is bad in law. 5. Ld. D.R. however, relied upon the order of the A.O. 6. Considering the facts of the case in the light of material on record, I am of the view that initiation of re-assessment proceedings 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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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 proceedings had earlier been initiated but dropped. The A.O. had not disclosed any new material for reopening of the assessment. The notice for re-assessment was not valid and were liable to be quashed. 7. In the facts and circumstances of the case, i .....

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