TMI Blog2018 (6) TMI 402X X X X Extracts X X X X X X X X Extracts X X X X ..... he revenue. - I.T.A. No. 1425/Kol/2014 - - - Dated:- 30-5-2018 - Shri P.M. Jagtap, AM And Mrs. Madhumita Roy, JM Shri Sallong Yaden, Addl. CIT appearing on behalf of the Revenue Shri A.K. Tibrewal, FCA appearing on behalf of the Assessee ORDER PER P.M. JAGTAP, AM This appeal filed by the revenue is directed against the order of Ld. CIT(Appeals) 19, Kolkata dated 05.03.2014 and in the solitary ground raised therein, the revenue has challenged the action of the Ld. CIT(A) in cancelling the assessment made by the A.O. under section 143(3) / 147 of the Income Tax Act, 1961 by holding the same to be invalid. 2. The assessee in the present is a partnership firm which is engaged in the business of trading in oil. The return of income for the year under consideration was filed by it on 22.09.2005 declaring a total income of ₹ 59,190/-. In the assessment originally completed under section 143(3) vide an order dated 20.12.2007, the total income of the assessee was determined by the A.O. at ₹ 87,950/-. There was some mistake in the said determination which was rectified by the A.O. vide an order dated 07.02.2008 passed under section 154 reducing the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d assessment within the meaning of section 147 of the Act. As per the P L A/c for the year ending on 31.03.2005, the turnover of the firm is ₹ 10,86,38,377/- (ten crore eighty six lakhs thirty eight thousand three hundred and seventy seven). This figure is also quoted against the item 32 [GP/Turnover, NP/Turnover etc.] in the audit report in form 3CD. In course of assessment proceedings, the assessee filed a list giving the names of customers with sales worth ₹ 50,000/- or more and a consolidated figure of sales less than ₹ 50,000/-. The figure of sales match and it also clarifies that this figure is not of tax. The firm also filed on extract of sales register giving monthly sales figure for all the months of the relevant previous year and they total to ₹ 11,66,34,952/- (eleven crore sixty six lakhs thirty four thousand nine hundred and fifty two) only for the whole year. It appears that the sales register figure had not been properly accommodated in the P L A/c. Otherwise, net profit figure would have arisen by the difference of ₹ 79,96,575/-. Besides, I have also checked the monthly figures [with cumulative ones under the closing balance i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s any fresh tangible material which has come to his possession after making the original assessment nor there could be a reasonable belief of escapement of income. This is a case of change of opinion, suspicion and review of the same set of papers and documents on existing records of assessee.......... Thereafter, the appellant has cited a number of case laws in support of its stand. 4. The Ld. CIT(A) found merit in the submission made by the assessee on this issue and annulled assessment made by the A.O. under section 143(3) / 147 by holding the same to be invalid for the following reasons given in paragraph no 4.2 and 4.3 of impugned order: 4.2 The assessment order and the submission of the appellant have been carefully considered in deciding the issue at hand. The issue of reopening of an assessment completed u/s 143(3) of the Act on the basis of available information at the time of the original scrutiny proceeding was a subject matter of numerous litigations. There are rulings of High Courts as well as the Apex Court which have held that primary information which was available with the A.O. during the course of a scrutiny assessment proceeding cannot be used to reope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the A.O. in reopening the assessment which was completed u/s 143(3) as discussed (supra), the order passed by him now cannot be sustained and is thus held to be an ultra vires order . As a result, the assessment order u/s 147/143(3) passed by the A.O. vide order dated 16.06.2011 for the A.Y. 2005-06 is hereby annulled on the ground of legal infirmity. 5. Keeping in view, the decision rendered by him on the preliminary issue cancelling the assessment made by the A.O. u/s 143(3)/147, the Ld. CIT(A) did not adjudicate upon the other issues raised by the assessee challenging the additions made by the A.O. in the said assessment on merit. Aggrieved by the order of the Ld. CIT(A), the revenue has preferred this appeal before the Tribunal: That on the fact and in the circumstances of the case, Ld. CIT(A) erred both in law as well as in facts in holding the order as on ultra vires order and thereby annulling the order on the ground of legal infirmity. 6. We have heard the arguments of both the sides and also perused the relevant material on record. It is observed that the assessment completed by the A.O. under section 143(3) / 147 of the Act has been annulled by the Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce in the sales register] in the computerized sales register. There is no arithmetical mistake. Thus, I have reason to believe the difference of ₹ 79,96,575/- (seventy nine lakhs ninety six thousand five hundred and seventy five) [chargeable to tax] escaped assessment u/s 143(3) within the meaning of section 147. We have also noted the purchase amount debited in the P L A/c. It is ₹ 10,64,58,865/-. The assessee has given a party-wise break up [for parties ₹ 50,000/- or more] and it gives a total of ₹ 10,64,58,865/-. Obviously, the suppliers, the assessee means to say, are all of ₹ 50,000/- or more. In course of assessment proceedings, an extract of computerized purchase register was given, wherein monthly purchase amount was furnished. They give a total purchase amount of the year at ₹ 10,57,65,988/- (rounded off). The figure has been recalculated and no arithmetical error found in its cumulative figure. So, according to me, if suggests that the difference in figure that is ₹ 6,92,877/- chargeable to tax had escaped assessment within the meaning of section 147 because of inflated debit entries in the P L A/c. 7. A perusal of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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