IN THE INCME TAX APPELLATE TRIBUNAL, “C” BENCH, KOLKATA
I.T.A No. 1638/Kol/2012 A.Y : 2005-06

DCIT (Appellant) vs M/s. Lexicon Auto Ltd (Respondent)
Date of Order: 12-10-2015

ORDER

SHRI M.BALAGANESH, AM

 This appeal of the revenue arises out of the order of the Learned CITA in Appeal No. 195/CIT(A)-I/Cir-1/2010-11 dated 22-08-2012 for the Asst Year 2005- 06 passed against the order of assessment framed by the Learned AO u/s 143(3) read with section 147 of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’).

2. Shri.Sanjay Mukherjee, JCIT, the Learned DR argued on behalf of the revenue and Shri. D.S.Damle, FCA, the Learned AR argued on behalf of the assessee.

3. The only issue to be decided in this appeal is whether in the facts and circumstances of the case the assessment could be reopened u/s 147 of the Act.

4. The brief facts of this appeal is that the assessee is an authorized service agent for Tata Motors and had derived commission and service charges and revenue from workshop services and filed its return of income. During the course of original assessment proceedings, the assessee was asked to explain the difference in income with regard to the gross receipts from Tata Motors reflected in TDS certificate amounting to Rs. 3,07,32,697/- and amount shown as income by the assessee amounting to Rs. 1,41,86,834/-. The assessee had duly filed the reconciliation of service charges income from Tata Motors Ltd before the Learned AO and assessment was completed u/s 143(3) accepting the contentions of the assessee. Later the assessment was reopened u/s 148 of the Act and reassessment was framed by adding the difference in income of Rs. 1,65,45,863/- ( 30732697-14186834) as income escaping assessment. On first appeal, the Learned CITA quashed the reassessment proceedings by stating that the reassessment was based on change of opinion. Aggrieved, the revenue is in appeal before us on the following grounds:-

1. That on the facts and in the circumstances of the case the ld.CIT(A) was not justified in quashing the proceedings u/s. 147 accepting assessee’s submission that grounds of re-opening were not provided to them, ignoring completely the evidence on record that such grounds were duly communicated to them by letter dated 02-09-2011.

2. That the appellant craves leave to add, alter/or amend any of the grounds of appeal during the course of hearing.

5. The Learned DR vehemently supported the order of the Learned AO. In response to this, the Learned AR filed a detailed paper book containing the various details filed before the Learned AO during the original assessment proceedings and more specifically to the reconciliation of the service charges and workshop services income explaining the difference between TDS certificate from Tata Motors Ltd visa- vis income declared by the assessee. He further argued that the entire reassessment was rightly quashed by the Learned CITA as void ab initio as it suffered from the following deficiencies:-

a) The reasons recorded for reopening the assessment were supplied to the assessee by the Learned AO vide his letter dated 2.9.2011 which is after the completion of reassessment on 10.12.2010.

b) The reassessment is admittedly triggered on the basis of audit objection as could be evident from the last para of the reassessment order in the ‘confidential note not for assessee.’ c) The reassessment is based on merely change of opinion without any tangible material as all the details were filed before the Learned AO during the course of original assessment proceedings itself for which necessary evidences were filed in the paper book submitted before us.

6. We have heard the rival submissions and perused the materials available on record including the detailed paper book filed by the assessee numbering from pages 1 to 69. We find from the records that the entire details have already been filed on the impugned issue of service charges income reconciliation before the Learned AO at the time of original assessment proceedings and an opinion was duly framed by the Learned AO while completing the original assessment proceedings u/s 143(3) of the Act. Later the reopening was done to have a relook on the same issue amounts only to change of opinion without any tangible material with the Learned AO. Hence the following case laws relied on by the Learned CITA in his order are very well placed on the impugned issue:-

• CIT vs Kelvinator of India Ltd reported in 320 ITR 561 (SC)
• Steamship Company Ltd vs CIT reported in 275 ITR 155 (Cal)
• Amrit Feeds Limited vs ACIT reported in 239 CTR 82 (Cal)
• Rallis India Ltd vs ACIT reported in 323 ITR 54 (Bom)
• Purity Tech Textiles Pvt Ltd vs CIT reported in 325 ITR 459 (Bom)
• Cartini India Ltd vs Additional CIT reported in 314 ITR 275 (Bom)
• DCIT vs Hindusthan Paper Corporation in ITA No. 1691 / Kol / 2010 of Kolkata Tribunal

6.1. We also find from the foot note attached at the last page of the reassessment order which is served on the assessee as part and parcel of the reassessment order that the entire reassessment has been triggered only based on an audit objection and not based on independent application of mind by the Learned AO. For the sake of convenience, the foot note is attached herewith :-

Confidential note not for assessee

The proceedings u/s 147 was initiated as a remedial action in reference to revenue audit objection. Detailed clarification with reconciliation was submitted to audit on 27.8.2010 which is available on record but the revenue audit did not accept the explanation and reconciliation so submitted vide their letter dated 28.10.2010. Therefore, addition is made to protect the interest of the Revenue.

Hence in view of the aforesaid facts and circumstances and various judicial precedents relied upon, we hold that the action of the Learned AO in reopening the assessment is merely based on change of opinion on the same set of facts which were already available on record with him and entire reassessment had been triggered only based on audit objection and accordingly we find no infirmity in the order of the Learned CITA in this regard.

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

THIS ORDER IS PRONOUNCED IN OPEN COURT ON 12/10/2015

Sd/-                                                                 Sd/-
( Mahavir Singh, Judicial Member )   (M. Balaganesh, Accountant Member)