Salarpuria Properties Pvt Vs DCIT (ITAT Kolkata)
ITAT Kolkata held that initiation of reassessment proceeding under section 148 of the Income Tax Act for the purpose of mere verification of the claim is unsustainable in law.
Facts- Vide the present appeal, the appellant has challenged the order passed by the CIT (Appeals) contested that CIT(Appeals) has erred in confirming the reassessment order passed by the assessing officer under section 148 of the Income Tax Act.
Conclusion- Held that we unhesitatingly allow the cross objection of the assessee in respect of legality of the reassessment proceedings initiated u/s. 148 of the Act and reassessment order passed u/s. 143(3) read with section 147 of the Act. Further, from the findings and decision given by the Ld. CIT(A) on the merits of the case, we note that issues raised by the assessee have been dealt meritoriously as reproduced above, for which discussion has already been made while dealing with the cross objection of the assessee. Accordingly, we do not find any reason to interfere with the findings given by the Ld. CIT(A) in this respect as reproduced above. Thus, the Cross objection filed by the assessee is allowed and the appeal of the revenue is dismissed.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
These captioned appeals filed by the assessee and the revenue are against the order of Ld. CIT(A)-6, Kolkata vide Appeal No. CIT(A), Kolkata-6/10628/2016-17 dated 11.10.2019 against the order of Ld. DCIT, Circle-1, Kolkata u/s. 143(3)/1 15JB/ 147 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”),dated 30.03.2013. And the Cross Objection preferred by the assessee against the appeal of revenue in ITA No. 736/Kol/2022.
2. During the course of hearing, it has been brought to our knowledge that earlier, assessee had filed appeal in ITA No.2502/KOL/2019 which was dismissed as withdrawn on 28/11/2022. However, due to some technical error in the order regarding the names of the Members, the said order dated 28/11/2022 was recalled and it was ordered to pass a fresh order by the Bench on the withdrawal of appeal. In the meantime, Department has also filed appeal for the same assessment year against which the assessee has filed cross objections. However, assessee’s appeal which was reinstituted was not listed with these appeals nor a fresh order of dismissal was passed. Therefore, the registry was directed to attach the assessee’s appeal with the appeal of the Revenue and its Cross Objection to avoid any complications at a later stage. Matter was listed on 27/04/2023 for further hearing for which approval was granted by the Hon’ble Vice President (KZ) for clubbing of the two appeals and cross objection to be heard together in Bench “C”.
3. First, we take up ITA No.2502/Kol/2019 which was recalled vide order dated 28.11.2022 to pass the order a fresh.
3.1 At the outset, ld. Counsel for the assessee has invited our attention to the impugned order of Ld. CIT(A) to submit that he has dismissed the legal ground taken by the assessee regarding the validity of reassessment order passed u/s 147 of the Act. However, Ld. CIT(A) has given relief to the assessee on merits. The Hon’ble Bench vide order dated 29.08.2022, considering the above fact, enquired from the ld. DR as to whether the Revenue has filed any appeal contesting the relief granted by the CIT(A) to the assessee. The contents of the order dated 29.08.2022 of this Tribunal, for the sake of ready reference, are reproduced as under:
“The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax A. Y. 2005-06.
The assessee has challenged reopening of assessment. Its ground regarding reopening has been rejected by the ld. CIT (Appeals) in the impugned order. However, Ld. CIT(Appeals) has allowed the appeal of the assessee on merit. According to the ld. Counsel for the assessee, an addition of Rs. 7,23, 97, 500/- was made by the ld. Assessing Officer u/s 69C of the Income Tax Act. The tax effect by virtue of relief given by the ld. CIT(Appeals) is more than monetary limit and, therefore, Revenue must have come up in appeal.
On the other hand, ld. D.R. was unable to lay his hand on the information whether Revenue has filed an appeal or not? He seeks further time for verification of this fact. The appeal is pending in the Tribunal from the last more than three years. It is already on the Board since December, 2021. More than eight months have expired but Department failed to collect the information about the status of its appeal.
In view of the above situation, we grant one more adjournment, which is a last opportunity to the Revenue for ascertaining the status of its appeal, if any, filed before the Tribunal. Hearing is adjourned to 11th October, 2022.”
3.2. Thereafter, the case has been adjourned several times at the request of the ld. DR to furnish information as to whether the Revenue has filed any appeal against the impugned order of the CIT(A). On 3rd November 2022, Ld. DR submitted that though the matter was enquired but there could not be found any record from which it could be gathered that the Revenue has filed any appeal in this case.
3.3. Ld. AR submitted that assessee had filed the present appeal on the legal ground regarding the validity of reassessment order passed u/s 147 of the Act, whereas on merits, the assessee had already been granted relief by the CIT(A). At this stage, since the Revenue has not filed any appeal, therefore, the issue involved in this appeal has been rendered academic in nature. He, therefore, by way of separate letter dated 24.11.22 has requested that he may be allowed to withdraw the present appeal with liberty to file cross-objections, if, the Revenue chooses to file any appeal at the later stage. He has further submitted that in case, it transpires later on that the Revenue has already preferred an appeal against the impugned order of the CIT(A) then, leave may be granted to the assessee for restoration of the present appeal.
Ld. DR did not object to the same.
3.4. In view of above submissions, appeal of the assessee is dismissed as withdrawn being rendered academic in nature, however, with the liberty that if at a later stage it is found that the Revenue’s appeal is also pending before this Tribunal against the impugned order of the CIT(A), then the appeal of the assessee will be restored. Further, if the Revenue choose to file any appeal against the impugned order of the CIT(A) at a later stage, then the assessee will be at liberty to file cross-objections to the said appeal on the relevant issues including the issue relating to the validity of the assessment framed u/s 147 of the Act. Subject to above observation, the appeal of the assessee is, hereby, dismissed as withdrawn.
3.5. In the result, the appeal of the assessee is dismissed as withdrawn.
4. Now we take up the appeal in ITA No. 736/Kol/2022 and CO No. 3/Kol/2023
5. This appeal is filed by the department on 16.12.2021 which is after the date of recalling the order in ITA No. 2502/Kol/20 19. Ld. Counsel for the assessee submitted chronology of events in respect of various events which took place and are listed as under:
