RNG Construction Co. Vs Addl. Jt. Dy. Asstt. ITO (ITAT Indore)
ITAT Indore held that reopening of assessment done by Assessing Officer under section 147 of the Income Tax Act, based on tax audit report already available during original assessment, without any fresh and new material is invalid and liable to be quashed.
Facts- Post completion of scrutiny assessment, the AO re-opened assessment u/s 147 through a notice dated 20.03.2020 u/s 148 after recording reasons. Finally, the AO completed re-opened assessment vide order dated 27.09.2021 re-determining total income at Rs. 26,77,719/- after making total additions/disallowances of Rs. 10,62,939/- consisting of two items, namely (a) disallowance of Rs. 2,30,781/- u/s 36(1)(va) on account of non-payment of PF/ESI contributions by due date and (b) disallowance of Rs. 8,32,158/- u/s 43B on account of non-payment of service tax by due date.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Admittedly, in present case of assessee, the original assessment was finalised by AO u/s 143(3) and subsequently the case has been re-opened u/s 147 within four years taking into account the reporting made by auditors in “tax audit report”. It is further a fact that the “tax audit report” was very much available with AO during original assessment. It is further a point that except such “tax audit report”, there is no other material “fresh” or “new” with the AO for initiating the proceeding of re-assessment. Thus, these facts of assessee’s case are identical to the case of Kelvinator decided by Hon’ble Delhi High Court in favour of assessee and against revenue. Therefore, following the view taken in Kelvinator’s case, we too hold that in present case the proceeding of re-assessment done by AO u/s 147 is not valid and not maintainable. Hence, we quash the proceedings initiated and order of re-assessment passed therein by AO. The assessee succeeds in its Ground.
