TMI Blog2020 (9) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... gs. There was really a disclosure of full and complete facts by the Assessee before the Assessing Authority during the course of Original Assessment Proceedings itself under Section 143(3) - Thus on mere change of opinion, the Assessing Authority could not have invoked the reassessment proceedings under Section 147/148 - Decided in favour of assessee. - Tax Case ( Appeal ) Nos. 772 to 774 of 2017 - - - Dated:- 11-9-2020 - THE HON'BLE DR.JUSTICE VINEET KOTHARI And THE HON'BLE MR.JUSTICE KRISHNAN RAMASAMY For the Appellant : Mr.T.R.Senthilkumar Senior Standing Counsel assisted by Mrs.K.G.Usharani, Jr.Standing Counsel For the Respondents : Mr.M.P.Senthilkumar JUDGMENT ( Delivered by DR. VINEET KOTHARI , J ) The present Appeals are filed by the Revenue under section 260A of the Income Tax Act by raising the following purported substantial questions of law arising from the order passed by the Income Tax Appellate Tribunal on 20.4.2017 for the Assessment Years 2007-2008 and 2008-2009 in the case of two Assessees viz., URC construction (P) Ltd., Erode and Bharathi Constructions, Erode:- i) Whether the ITAT is correct in law in quashing the reass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k in the case of M/s.URC Construction Pvt. Ltd.:- On a perusal of details filed, it is seen that the assessee has not included TDS receipts of ₹ 13,57,306 as income. Hence, the same is brought to tax. (Add: ₹ 13,57,306) The assessee has defaulted in TDS payments on audit fees and hire charges paid of ₹ 44,45,185. Hence the said sum of ₹ 44,45,185 is disallowed u/s. 40(a)(ia) of the Income-tax Act, 1961. (Add: ₹ 44,45,185) 9. Therefore, it is obvious that the entire TDS certificates, opening stock, gross receipts from contractors, details of purchase, list of shareholders, copy of current account, copy of sales tax, general expenses claimed by the assessee, vehicle hire charges were available before the Assessing Officer. 10. Now the contention of the Revenue before this Tribunal is that the audit reports under Section 44AB of the Act do not disclose correct and full particulars. The assessees have furnished all the details before the Assessing Officer. The auditor, who prepared the report under Section 44AB of the Act, is expected to examine all the materials and record the same in the report prepared under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed out by it and therefore on such payments of rent made by the Assessee to such contractors for user of such Plant and Equipments Tax Deduction at Source was required to be done by the Assessee under Section 194-I of the Act and in the absence of the same, the amounts in question paid to the Contractors was liable to be added back as income of the Assessee under Section 40(a)(ia) of the Act. He submitted that an Audit Objection was also raised for those Assessment Years by the Audit Team of the Department and in the subsequent Assessment Years 2010-11 and 2011-12, the Assessee himself deducted Tax at Source on such Machine Hire Charges and deposited the same under section 194-I of the Act and in the year 2015, the Assessing Authority had reason to believe that for Assessment Years 2007-2008 and 2008-2009, it was liable to reopen and reassessment was required to be done for those Assessment Years, which are under challenge before us. 5. Against the re-assessment order, the Appeals preferred by the Assessee were dismissed by the learned Commissioner of Income Tax (Appeals) and in the Appeal before the learned Tribunal, the Assessee succeeded and the learned Tribunal held that r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, 5% of the above said expenses amounting to ₹ 14,43,450/- is disallowed as being excessive. Further, the Assessee has not included TDS receipts of ₹ 13,57,306/- as income. Hence, the same is brought to tax. The Assessee has defaulted in TDS payments on hire charges audit fees paid. Hence, the said sum of ₹ 44,45,185/- is disallowed under Section 40(a)(ia). 7. Having heard the learned counsel appearing for the parties, we are of the clear opinion that no substantial question of law arises in the present Appeal filed by the Revenue, as the law is well settled in this regard and unless as a matter of fact, the Revenue Authority can establish a failure on the part of the Assessee to truly and fully disclose the relevant materials during the course of original Assessment Proceedings, the reassessment proceedings, on mere change of opinion, cannot be initiated much less beyond the period of four years after the expiry of the Assessment Years, in terms of the first Proviso to section 147 of the Act. 8. In the present case, it appears that Machine Hire Charges paid by the Assessees to various Contractors or Sub-Contractors were fully disclosed not only in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r facts placed before us that there was really a disclosure of full and complete facts by the Assessee before the Assessing Authority during the course of Original Assessment Proceedings itself under Section 143(3) of the Act and therefore, even if anything is not highlighted in the Audit Report, the Assessee has shown that this aspect viz., non-deduction of TDS on the Machine Hire Charges attracting Section 194-I of the Act was very much discussed by the Assessing Authority during the original Assessment proceedings. 12. Therefore, we are of the opinion that on a mere change of opinion, the Assessing Authority could not have invoked the reassessment proceedings under Section 147/148 of the Act beyond the period of four years after the end of relevant Assessment Years. There is no dispute that the impugned notices under Section 147/148 were issued beyond the period of four years after the relevant Assessment Years viz., 2007-2008 and 2008-2009. The four years had expired in the year 2013, but, the notices were issued in the year 2015. 13. Thus, we do not find any substantial question of law to be arising in the present Appeals filed by Revenue and therefore, the Appeals are d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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