Reopening of the assessment under Section 148

IN THE INCOME TAX APPELLATE TRIBUNAL

DELHI BENCH ‘H’: NEW DELHI

BEFORE SHRI G.D.AGRAWAL, VICE PRESIDENT AND

SHRI I.C.SUDHIR, JUDICIAL MEMBER

IT (SS) A.No.303/Del/2003

Block Period: 01.04.1990 to 28.04.2000

Deputy Commissioner of Income Tax,

Central Circle-25,

Janpath Bhawan,

New Delhi.

(Appellant)

Vs.

Mrs. Shibani Dutta,

C/o Ramanand Aiyar & Co., CAs,

708, Surya Kiran Building,

19, Kasturba Gandhi Marg,

New Delhi – 110 001.

 (Respondent)

Appellant by: Smt.Lalitha Krishnamurthy, CA.

Respondent by: Shri A.K.Mishra, CIT-DR.

ORDER

PER G.D.AGRAWAL, VP:

This appeal by the Revenue is directed against the order of learned CIT(A)-I, New Delhi dated 27th March, 2003 for the block period 01.04.1990 to 28.04.2000.

2. The Revenue has raised the following grounds:-

“1. On the facts and circumstances of the case the ld.CIT(A) erred in deleting the addition of Rs.2,26,248/- made on account of jewellery by ignoring that no investment in jewellery was disclosed and no wealth tax return was filed.

2. On the facts and circumstances of the case the ld.CIT(A) erred in deleting the addition of Rs.9,41,289/- on account of unexplained credits in two banks accounts.

3. On the facts and circumstances of the case the ld.CIT(A) erred in deleting the addition of Rs.1,95,193/- made on account of undisclosed interest income.”

3. However, at the time of hearing before us, it was pointed out by the learned counsel that in this case, the assessee had challenged the block assessment to be barred by limitation. The ITAT in the interim order dated 25th October, 2011 has held the order to be within the period of limitation. Against the said interim order, the assessee had filed the appeal before the Hon'ble Jurisdictional High Court which, vide order dated 12th July, 2012 in ITA No.169/2012, has held the assessment to be barred by limitation. Once the assessment itself has been held to be barred by limitation, the grounds raised by the Revenue in its appeal do not survive.

4. Learned DR, on the other hand, relied upon the order of the Assessing Officer. However, he was fair enough to say that the Bench may pass appropriate order in the light of the decision of Hon'ble Jurisdictional High Court.

5. We have heard the arguments of both the sides and perused the material placed before us. IT(SS) A.No.303/Del/2003 (Revenue’s appeal) and cross-objection No.28/Del/2008 by the assessee came up for hearing before the ITAT on 17th October, 2011. In the cross objection, the assessee has challenged the validity of the assessment order on the ground that it is barred by limitation under Section 158BE of the Income-tax Act, 1961. As the cross-objection goes to the root of the matter, the same was taken up first and adjudicated vide interim order dated 25th October, 2011. The ITAT held that the assessment was completed within the period of limitation. Against the said interim order, the assessee filed appeal before the Hon'ble Jurisdictional High Court. Hon'ble Jurisdictional High Court, vide order dated 12th July, 2012 in ITA No.169/2012, decided the issue in favour of the assessee and held as under:-

“12. In our opinion and for the above reasons the Tribunal erred in relying on clause (iii) of the Expalnation-1 to Section 158BE to hold that block assessment order passed on 30.07.2002 is within the period of limitation. It failed to note that neither Section 129 nor its proviso is attracted to the case. Its further reasoning that the first proviso to Section 158BC(a) required no notice under Section 148 for making a block assessment, merely because the notice required to be issued under Section 158BC(a) calling for the block return is analogous to the notice under Section 148 to reopen an assessment, is without any basis, either on principle or on authority. The Tribunal has erroneously equated the notice issued under Section 158BC(a) to a notice issued under Section 148 to reopen an assessment and erred in further understanding the words “the time taken in reopening the whole or any part of the proceeding” appearing in clause (iii) of Expalnation-1 to mean a reopening of the assessment under Section 148. With respect, the reasoning appears to be convoluted and untenable. The reopening of the proceedings referred to in clause (iii) of Expalnation-1 is the reopening of the proceedings for the assessment which have been completed in part by an earlier incumbent of office, and not the reopening of the assessment under Section 148. This much should have been clear to the Tribunal since the said clause in the Explanation clearly refers to the proviso to Section 129. The logic embodied in the clause has been completed missed by the Tribunal.

13. For the above reasons, we answer the substantial question of law in the negative, in favour of the assessee and against the Revenue and allow the appeal of the assessee with no order as to costs.”

6. In view of the above judgment of the Hon'ble Jurisdictional High Court holding the assessment itself to be barred by limitation, we are of the view that the grounds raised by the Revenue in its appeal do not survive. The same are dismissed.

7. In the result, the appeal of the Revenue is dismissed.

Decision pronounced in the open Court on 22nd March, 2013.

Sd/- Sd/-

(I.C.SUDHIR) (G.D.AGRAWAL)

JUDICIAL MEMBER VICE PRESIDENT

Dated: 22.03.2013

VK

Copy forwarded to:

1. Appellant: Deputy Commissioner of Income Tax, Central Circle-25, Janpath Bhawan, New Delhi.

2. Respondent: Mrs. Shibani Dutta, C/o Ramanand Aiyar & Co., CAs, 708, Surya Kiran Building, 19, Kasturba Gandhi Marg, New Delhi – 110 001.

3. CIT

4. CIT (A)

5. DR, ITAT

Assistant Registrar