Gulab Badgujar (HUF) Vs CIT (Central) (ITAT Pune)
The question which arises is the exercise of revisionary jurisdiction by the Commissioner of Income Tax under section 263 of the Act against the order passed under section 143(3) r.w.s. 147 of the Act, wherein the assessment proceedings were re-opened on specific reasons recorded for re-opening. We have already referred to the additions made on the aforesaid reasons in the hands of assessee in the Para above. Once, the re-assessment proceedings are initiated on a specific issue and the addition is made in the hands of the assessee then the Commissioner of Income Tax is precluded from exercise of jurisdiction under section 263 of the Act on a ground which is not covered by the reasons during the re-opening of the assessment since the time for completing the assessment u/s 143(3) of the Act had expired. Hence, we find no merit in the exercise of revisionary power by the Commissioner of Income Tax under section 263 of the Act in the present facts and circumstances.
FULL TEXT OF THE ITAT JUDGEMENT
1. These two appeals filed by assessee are emanating out of separate orders of Commissioner of Income Tax (Central), Nagpur, both dated 19.03.2015 under section 263 of the Act for the assessment years 2006-07 & 2011-12, respectively.
2. Both the appeals relating to the same assessee against order passed under section 263 of the Act were heard together and are being disposed of by this consolidated order for the sake of convenience.
3. The grounds raised by the assessee in A.Y. 798/PUN/2015 for A.Y. 2006-07 reads as under :
“1. On the facts and in the circumstances of the case and in law, the Commissioner of Income Tax (Appeals) – 1, Mumbai erred in invoking provisions u/s 263 of the Act, on the issue which was decided by the Assessing Officer and therefore such addition which is merely based on change of opinion is bad in law and void ab initio.
2. On the facts and in the circumstances of the case and in law, the Commissioner of Income Tax (Appeals) – 1, Mumbai erred in holding that the assessment order passed u/s 143(3) r.w.s. 147 on 14.02.2014 is erroneous and prejudicial to the interest of the revenue.”
3.1 Subsequently, assessee filed the additional ground which reads as under :
“On the facts and in the circumstances of the case and in law, Learned CIT(Central), Nagpur, erred in passing order u/s 263, for considering the revision of order passed u/s 143(3) r.w.s. 147, dt.14.02.2014, for Asst. Year 2006-07, especially in view of the fact that the impugned proceedings were initiated post search enquiries in case of Suyojit Group, and necessary explanations were offered before DDI(Inv), in connection with documents seized during the search action and necessary inquiries are already made.
4. Similar grounds have been raised in ITA No.799/PUN/2015 for A.Y. 2011-12.
5. First, we shall take up appeal relating to A.Y. 2006-07.
6. Before us, Ld.A.R. submitted that the exercise of revisionary powers in both the assessment years lacks jurisdiction and therefore are bad in law. He submitted that the basis on which assessments were reopened were looked into by AO in the re-assessment proceedings and the additions were made. In such a situation, exercise of revisionary proceedings are not permissible as reopening was on specific grounds and for this proposition, he relied on various decisions. He therefore submitted that the orders of Commissioner of Income Tax be set aside.
Ld. D.R. on the other hand, supported the order of Commissioner of Income Tax.
7. We have heard the rival submissions and perused the material on record. Briefly, in the facts of the case, assessee has furnished the original return of income on 16.08.2010. Search under section 132 of the Act was carried out on Suyojit Group of cases on 17.09.2010. During the course of search, certain documents were found and seized. Thereafter, elaborate enquiries were made and the seized documents were confronted and statement of Shri Gulab Maharu Badgujar was recorded on 16.10.2010. Before the DDIT., Investigation, the transaction was explained vide letter dt.09.11.2010. Post the search and the enquiries made, no notice under section 153C of the Act or Sec.148 of the Act were issued to the assessee; but notice under section 153C of the Act was issued to several other parties. Thereafter, notice under section 148 of the Act was issued to the assessee on specific reasons. The AO passed order under section 143(3) r.w.s. 147 of the Act vide order dated 14.02.2014. The assessment was re-opened for specific reasons and addition on account of the said reasons was made in the hands of assessee which is not disputed. Thereafter, the Commissioner of Income Tax exercised his jurisdiction under section 263 of the Act and issued show cause notice to the assessee. The Commissioner of Income Tax refers to part of a transaction between assessee and Shri Anant Keshav Rajegaonkar, whose residential premises was also searched under section 132 of the Act as part of Suyojit Group of cases on 17.09.2010. It may be pointed herein itself, that the basis of the initiation of the 263 proceedings is a document found during the search which reflects a transaction totaling to Rs.2.98 crore spread over a period of five years. The years to which it relates are as under :
