Gopal Yadav Selvakumar v. The Income-tax Officer, Ward II, Vellore
[Citation -2020-LL-0717-44]

Citation 2020-LL-0717-44
Appellant Name Gopal Yadav Selvakumar
Respondent Name The Income-tax Officer, Ward II, Vellore
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 17/07/2020
Assessment Year 2011-12
Judgment View Judgment
Keyword Tags reopening of assessment • escaped assessment • issuance of notice • change of opinion • reason to believe • audit objection • time limit
Bot Summary: The assessee's case was taken up for limited scrutiny in so far as the deposits in the savings back account, to which, the assessee stated that the deposit or funds belonging to the above said partnership firm, wherein, he and his wife were the partners. The CIT(A) dismissed the assessee's appeal insofar as the reopening of assessment is concerned, and on the merits, the CIT(A) held that the assessee has not raised any ground of appeal that is to presume that the assessee has not pressed the ground of addition made by the Assessing Officer on the issue of addition of Rs.1,51,79,950/-. The assessee preferred an appeal before the Tribunal raising all the issues and the Tribunal remanded the matter to CIT(A) to adjudicate the issue on merits. After carefully going through the impugned order, we find that the Tribunal ought to have adjudicated all the grounds raised by the assessee that is whether the reopening is valid in law and whether there were materials in the hands of the Assessing Officer for reopening the assessment. Factually, whether the assessee had produced the books of accounts and such other material as we find that the Tribunal did not consider these issues. Accordingly, the appeal filed by the assessee is allowed and the order dated 22.06.2018 passed by the Income Tax Appellate Tribunal, 'A' Bench, Chennai, in I.T.A.No. The assessee is entitled to raise all the contentions both factual and legal before the Tribunal which shall be decided on merits.


T.C.A.No.821 of 2018 IN HIGH COURT OF JUDICATURE AT MADRAS DATED : 17.07.2020 CORAM HON'BLE MR.JUSTICE T.S.SIVAGNANAM & HON'BLE MRS.JUSTICE V.BHAVANI SUBBAROYAN T.C.A.No.821 of 2018 and C.M.P.No.20409 of 2018 Shri Gopal Yadav Selvakumar 65 Vellore Main Road, 1st Street, Arcot, 6325033 Appellant Vs. Income Tax Officer, Ward II, Vellore. Respondent Tax Case Appeal is filed under Section 260A of Income Tax Act, 1961 against order dated 22.06.2018 made in I.T.A.No.111/Chny/2018 on file of Income Tax Appellate Tribunal, 'A' Bench, Chennai, for assessment year 2011 - 2012. For Appellant : Mr.Salai Varun For Respondent : M/s.V.Pushpa Standing Counsel Judgment (Judgment was delivered by T.S.SIVAGNANAM.J) This appeal by assessee filed under Section 260A of Income http://www.judis.nic.in 1/9 T.C.A.No.821 of 2018 Tax Act, 1961 (the 'Act' for brevity), is directed against order dated 22.06.2018 passed by Income Tax Appellate Tribunal, 'A' Bench, Chennai, in I.T.A.No.111/Chny/2018, for assessment year 2011 - 2012. 2. tax case appeal was admitted on following substantial questions of law : i. Whether, on facts and in circumstances of case, Tribunal was right in law in remitting matter back to file of Commissioner for consideration on merits alone without adjudicating upon specific grounds on validity of assumption of jurisdiction under Section 147 of Income Tax Act, 1961? ii. Whether Tribunal was right in not taking cognizance of fact that reassessment was based on change of opinion sans any fresh tangible material? Iii. Whether, on facts and in circumstances of case, Tribunal was right in not holding that reassessment was invalid in view of non disposal of objections of appellant against reassessment under Section 147 vide separate order before passing order of assessment? iv. Whether Tribunal was right in directing Commissioner of Income Tax (Appeals) to adjudicate issue on merits alone with regard to addition made under http://www.judis.nic.in 2/9 T.C.A.No.821 of 2018 Section 69 of Income Tax Act, 1961, when validity of reassessment under Section 147 after completion of scrutiny assessment under Section 143(3) itself was challenged by appellant before Tribunal? And v. Whether, on facts and in circumstances of case, Tribunal was right in not holding that issue of notice under Section 147 and reassessment is not justified when proceeding under Section 154 is pending for same assessment? 3. We have heard Mr.Salai Varun, learned counsel appearing for appellant/assessee and M/s.V.Pushpa, learned Standing Counsel appearing for respondent/revenue. 4. assessee is individual and partner of firm under name and style of M/s.Gokulam Auto Finance & Consultancy. assessee's case was taken up for limited scrutiny in so far as deposits in savings back account, to which, assessee stated that deposit or funds belonging to above said partnership firm, wherein, he and his wife were partners. Assessment was completed under Section 143(3) of Act, by order dated 14.03.2013 with addition of Rs.27,000/-. assessment was reopened by issuance of notice under Section 148 of Act on 21.10.2014. assessee's case was that reopening is not valid in law as it is clear case of change of opinion. contention advanced by assessee was not accepted and reassessment proceedings were completed on 30.03.2016 http://www.judis.nic.in 3/9 T.C.A.No.821 of 2018 determining total taxable income as Rs.54,43,060/-. Aggrieved by same, assessee preferred appeal before Commissioner of IncomeTax (Appeals) - 13, Chennai. 5. assessee contended that mere audit objection could not form basis to reopen completed assessment and refered to decision in case of Smt.Shalu Sachdeva Vs. ACIT (2015) Taxmann.com and CIT Vs. Mettur Chemical and Industrial Corporation (2000) 242 ITR 119). Further It was also contended that Assessing Officer had no reason to believe to reopen assessment and reopening amounts to change of opinion. Further, it was contended that reassessment is void, since Assessing Officer did not dispose off objections raised by assessee for reassessment in their letter dated 27.06.2015 and followed guidelines laid down by Hon'ble Apex Court in G.K.N Drive Shaft India Ltd. Vs. ITO (2013) 259 ITR 19. 6. Further, assessee also stated about existence of books of accounts and submitted that finding of Assessing Officer that there were no books of accounts is incorrect. Further, it was contended that entries relating to outstanding interest and bank interest which are also other additions made by Assessing Officer in assessment are entries relating to firm which is assessed separately as entity and that cannot be reason for reopening individual assessee's assessment. Further, It http://www.judis.nic.in 4/9 T.C.A.No.821 of 2018 was contended that assessment order is void as it is passed after time limit prescribed under Act since it is passed and dispatched only on 05.04.2016 with predetermined addition entered on 30.03.2016. 7. CIT(A) dismissed assessee's appeal insofar as reopening of assessment is concerned, and on merits, CIT(A) held that assessee has not raised any ground of appeal that is to presume that assessee has not pressed ground of addition made by Assessing Officer on issue of addition of Rs.1,51,79,950/-. Accordingly, confirmed addition. net result being appeal dismissed in toto. assessee preferred appeal before Tribunal raising all issues and Tribunal remanded matter to CIT(A) to adjudicate issue on merits. 8. So far as validity of reopening is concerned, we find that Tribunal did not render any specific finding. After carefully going through impugned order, we find that Tribunal ought to have adjudicated all grounds raised by assessee that is whether reopening is valid in law and whether there were materials in hands of Assessing Officer for reopening assessment. So assessee is right in contending that audit objection cannot be basis for reopening. Assessing Officer has not recorded any reasons as to why he came to conclusion that income chargeable to income tax has escaped assessment and what was belief which led to issuance of notice under Section 148 of Act. http://www.judis.nic.in 5/9 T.C.A.No.821 of 2018 9. Factually, whether assessee had produced books of accounts and such other material as we find that Tribunal did not consider these issues. We deem it appropriate to set aside order passed by Tribunal and remand matter back to Tribunal for fresh consideration. 10. Accordingly, appeal filed by assessee is allowed and order dated 22.06.2018 passed by Income Tax Appellate Tribunal, 'A' Bench, Chennai, in I.T.A.No.111/Chny/2018, is set aside and appeal is restored to file of Tribunal to hear matter afresh and in accordance with law. assessee is entitled to raise all contentions both factual and legal before Tribunal which shall be decided on merits. 11. In light of remand order, question of answering substantial questions of law does not arise and they are left open. No costs. Consequently, connected miscellaneous petition is closed. (T.S.S.J.,) (V.B.S.J.,) 17.07.2020 raja Index : yes/no Internet : yes/no Speaking Order/Non-Speaking Order To http://www.judis.nic.in 6/9 T.C.A.No.821 of 2018 Income Tax Appellate Tribunal, 'A' Bench, Chennai. http://www.judis.nic.in 7/9 T.C.A.No.821 of 2018 T.S.SIVAGNANAM.J., and V.BHAVANI SUBBAROYAN.J., raja T.C.A.No.821 of 2018 and C.M.P.No.20409 of 2018 http://www.judis.nic.in 8/9 T.C.A.No.821 of 2018 17.07.2020 http://www.judis.nic.in 9/9 Gopal Yadav Selvakumar v. Income-tax Officer, Ward II, Vellore
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