Section 147 r.w.s. 154 – Initiation of two parallel proceedings on a similar subject matter, cannot sustain. If first proceedings have been validly initiated, then such proceedings must come to an end for making a way for the initiation of another proceedings on the same subject matter. Unless the earlier proceedings are buried, either by way of an order on merits or by dropping the same, no fresh subsequent proceedings on the same subject matter can be initiated.
FACTS
The assessee, a senior advocate by profession, filed his return of income for assessment year 2006-07 declaring total income of Rs. 8,39,253. The Assessing Officer (AO) vide order dated 26.3.2008, assessed the total income of the assessee to be Rs. 8,56,753.
The AO issued notice u/s. 154 of the Act dated 23.2.2011 intimating the assessee that he proposes to rectify the order passed u/s. 143(3) of the Act to include in his total income receipts of Rs. 4,47,600 which were received by the assessee, as per TDS certificates, but which were not included in total income.
Subsequently, the AO reopened the assessment on the ground that assessee has claimed credit for TDS against current years income on receipts of Rs. 4,47,600 but the same have not been offered for taxation. The assessment was completed u/s. 147 r.w.s. 143(3) of the Act by making a total addition of Rs. 2,37,500.
Aggrieved, the assessee preferred an appeal to CIT(A) and interalia argued that since the AO had issued notice u/s. 154 of the Act initiation of reassessment proceedings was not valid.The CIT(A) upheld the initiation of reassessment proceedings and the additions made.
Aggrieved, the assessee preferred an appeal to the Tribunal.
HELD
The Tribunal on perusal of copy of notice u/s. 154 along with the reasons recorded for reopening observed that the subject matter of both the notices was the same viz. receipts of Rs. 4,47,600 which in the opinion of the AO had escaped taxation. The Tribunal observed that during the continuation of the proceedings u/s. 154, the AO embarked upon the same issue by means of a separate reassessment proceedings without concluding the earlier proceedings initiated u/s. 154. It goes without saying that initiation of two parallel proceedings on a similar subject matter, cannot be sustained. If first proceedings have been validly initiated, then such proceedings must come to an end for making a way for the initiation of another proceedings on the same subject matter. Unless the earlier proceedings are buried, either by way of an order on merits or by dropping the same, no fresh subsequent proceedings on the same subject matter can be sustained. The Tribunal held that since the rectification proceedings u/s. 154 were initiated in 2011 and these were still on in the year 2013, when the proceedings u/s. 147 were initiated on the same subject matter, the proceedings u/s. 147 cannot stand during the continuation of proceedings u/s. 154. The Tribunal set aside the initiation of reassessment proceedings by means of a notice u/s. 148 and the proceedings flowing therefrom.
The appeal filed by the assessee was allowed.
