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2022 (3) TMI 1034 - HC - Income TaxReopening of assessment u/s 147 - Addition u/s 14A - HELD THAT:- Four years embargo has three exceptions and one of the exceptions is failure to disclose fully and truly all material facts necessary for assessment. That is the bone of contention in the writ petitioner's campaign against the impugned order and therefore it tantamounts to begging the question. Therefore, the limitation point is clearly a non-starter. Turning to the argument on Section 14-A read with Rule 8D which has been captured supra as well as the argument on non-consideration of objections besides audit objections not being a valid piece of information, all these three points can be answered in one go and that one answer is the annexure to Section 142(1) notice. As articulated in the annexure that disallowance under 14A of IT Act should be made as per the methodology prescribed in Rule 8D of the IT Rules and it is seen that Section 14-A read with Rule 8D was not adhered to by the assessee in computation of income Disallowance under 14A of IT Act should be made as per the methodology prescribed in Rule 8D of the IT Rules and it is seen that Section 14-A read with Rule 8D was not adhered to by the assessee in computation of income. Therefore, this matter turns on facts. To be noted, annexure also makes it clear that the writ petitioner assessee bank itself made disallowance to the tune of over 69.23 lakhs under Section 14A and it is in that context that there is a reference to Section 14A read with Rule 8D. The second paragraph of the annexure also deals with this aspect of the matter and makes it clear that disallowance of interest / expenditure ought to have been computed at a particular quantum where as the assessee bank has disallowed an amount of only 69.23 lakhs and odd. These need to be disallowed is the point raised. All this turns heavily on facts. These are all questions of fact. Therefore, it cannot be gainsaid that Section 14 A and Rule 8D have not been applied. The argument that the objections have not been considered may not hold water as the annexure does deal with the crux of the objections but it may be too early a stage in the proceedings to express any opinion on this aspect of the mater. As rightly pointed out by learned Revenue Counsel, reassessment notice under Section 148 of IT Act i.e, impugned notice if carried to its logical end, in the facts and circumstances of the case, will clearly neutralize all these arguments and the writ petitioner assessee bank will not be aggrieved in any manner. This Court has taken into account all the facts and circumstances of the case and has also noticed that the writ petitioner assessee itself is a bank and this Court is unable to persuade itself to believe that the impugned notice is either bad calling for interference in writ jurisdiction (much less demanding to be a situation of being dislodged under writ jurisdiction) or a notice which causes undue hardship having the writ petitioner aggrieved.
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