9911796707
TMI Blog2023 (3) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... richy, dated 19.03.2020 relevant to the assessment year 2014-15. 2. Both the appeals filed by the Revenue and the assessee are delayed by 28 days and 18 days respectively in filing the appeal due to outbreak of Covid-19 pandemic and accordingly, the delay in filing the appeals by the Revenue and the assessee are condoned and admitted for adjudication. 3. Facts are, in brief, that the assessee is in the transport contract business and filed its return of income for the assessment year 2014-15 on 24.11.2014 declaring total income of Rs..69,95,190/-. The return filed by the assessee was selected for scrutiny to examine the expenses claimed by the assessee in the profit and loss account. The Assessing Officer issued notice under section 143(2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not liable to deduct tax at source as required by the provisions of Sec. 194C, the entire claim of hire charges of Rs..14,78,95,505/- has to be disallowed as per provisions of Sec. 40(a)(ia) of the Income-tax Act. Hence, I have a reason to believe that the entire claim of hire charges has escaped assessment on account of non deduction of TDS within the meaning of Clause (c)(iii) of the explanation 2 to Sec. 147 of Income tax Act. Hence, it is requested that the JCIT may accord necessary approval to initiate the proceedings to reopen assessment u/s. 147 of the Income-tax Act." 5. After reopening of assessment, the Assessing Officer has observed that the assessee has made payment of hire charges to the tune of Rs..14,78,95,505/- withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness and in the return filed by it, the assessee made claim of expenses of Rs..14,78,95,505/-. The Assessing Officer has asked the assessee to explain large other expenses claimed in the profit and loss account and the AR of the assessee has filed a letter dated 07.10.2016 stating that "the assessee firm is doing transport contract for transporting Gypsum, cement to Cement companies. During the financial year 2013-14, hire charges received is Rs..16,01,75,684/- and hire charges paid is Rs..14,78,95,505/-. Since there is no separate column for this expenditure in the return of income, the same was included as other expenses but shown separately in the said column". After examining all the documents and details produced by the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iny assessment proceedings. Having not done so, the Department cannot be permitted to avail of the extended time limit in the absence of any new or tangible material". The relevant portions of the judgement of the Hon'ble Madras High Court are reproduced as under: "10. Let us now see the sequence of events that have transpired in this case. The Assessee filed a return of income pursuant to which, an intimation dated 01.12.1998 under section 143(1) (a) of the Act was issued. The provisions of Section 143(2) require that if the Assessing Officer considered it necessary or expedient to ensure that the Assessee has not understated income, claimed excessive loss or underpaid tax in any manner, the assessment is to be subject to further scrutin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material' to come to the conclusion that there is escapement of income from assessment. Reasons must have a link with the formation of the belief.' 12. If the Assessing Officer, after issuing intimation u/s. section 143(1) does not to issue a notice u/s.143(2) of the Act to initiate proceedings for scrutiny of the return of income, the obvious conclusion is that he does not consider it necessary or expedient to do so, the inference being that the Return of Income filed in order. It is this opinion that cannot be arbitrarily changed by the Assessing Officer, to re-assess income on the basis of stale material, already on record. If, we thus keep in the mind, the above fundamental requirement of Section 147, it would be apparent that the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld. CIT(A) has also, by following various judgements annulled the assessment framed under section 147 of the Act and thus, we find no reason to interfere with the order passed by the ld. CIT(A). Accordingly, the ground raised by the Revenue is dismissed. 8.3 In so far as argument of the ld. DR on the issue of audit objection is concerned, we find that the audit objection on a point of law may constitute fresh information for reopening of assessment. However, if the audit objection on factual issue and, where, the audit party has quantified escapement, then, definitely, it does not constitute information for reopening of assessment. In this case, if we go by audit note issued by the audit party, it points out disallowance of 40(a)(ia) of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
