TMI Blog2008 (4) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... n specified in proviso to section 147 is not satisfied and therefore reopening of the assessment is invalid. Your appellant submits that under the facts and circumstances of your appellant s case the learned CIT(A) ought to have held that the order passed under section 143(3) read with section 147 is void, illegal and bad-in-law and ought to have quashed the order. 2. The learned CIT(A) erred in concluding that purchase of coolers and refrigerators worth Rs. 38,17,972 is purchase of capital assets and not revenue expenditure. Your appellant submits that under the facts and in the circumstances of your appellant s case the learned CIT(A) ought to have directed the Assessing Officer to treat the purchase of coolers and refrigerators worth Rs. 38,17,972 as revenue as claimed by your appellant. 3. Without prejudice to the (2) above - ( a )The learned CIT(A) erred in upholding the order of the Assessing Officer treating a receipt of Rs. 14,46,811 from Britco Foods Ltd. as revenue receipt instead of treating the same as capital subsidy. Your appellant submits that under the facts and in the circumstances of your appellant s case the learned CIT(A) ought to have held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n before the Assessing Officer. 2.1 The assessee has taken the same contention before the CIT(A), but the CIT(A) was not impressed with the contention taken by the assessee and he decided the issue against it. The reasons given by the CIT(A) are found in Para-4.1 of his order, which are as under : "As per proviso to section 147 for reopening the assessment after a period of four years from the end of assessment year where the assessment is completed under section 143(3) one of the conditions to be satisfied is that there must be failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment and as per Explanation 1 production before the Assessing Officer of all books or other evidence from which material evidence could with diligence have been discovered by Assessing Officer will not amount to disclosure within the meaning of foregoing proviso. The facts of the case of the appellant show that capital expenditure on account of coolers and refrigerator has been debited by the appellant as revenue expenditure and the heading used is sales generating assets which is quite misleading heading, specially when the assessee has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) [2001] 251 ITR 416 (Bom.). 3. CIT v. Kelvinator of India Ltd. [2002] 256 ITR 1 Delhi). 4. Garden Silk Mills (P.) Ltd. v. Dy. CIT [1999] 237 ITR 668 (Guj.). 5. Idea Cellular Ltd. v. Dy. CIT [2008] 301 ITR 407 (Bom.). 3.1 Per contra , the learned Departmental Representative vehemently submitted that the Assessing Officer has not applied his mind on this particular issue, which is the subject-matter of reassessment proceedings It is further argued that there was no discussion in the assessment order and, hence, the proviso to section 147 of the Act is having no application The learned Departmental Representative supported the order of the authorities below. 4. We have heard the rival submissions. We have also considered the fact, which are placed before us as well as the paper book filed by the learned Authorised Representative of the assessee. There is no dispute in this case about the basic facts that the original assessment of the assessee was completed under section 143(3) of the Act and the assessment year involved is 1997-98 and notice under section 148 of the Act is issued dated 5-4-2004. As per the proviso to section 147 the time-limit prescribed f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made, but - ( i )income chargeable to tax has been under assessed; or ( ii )such income has been assessed at too low a rate; or, ( iii )such income has been made the subject of excessive relief under the Act; or ( iv )excessive loss or depreciation, allowance or any other allowance under this Act has been computed." 4.1 Section 147 of the Act had undergone a major change by Direct Tax Laws (Amendment) Act, 1987 with effect from 1-4-1989. As per proviso to section 147 if the assessment is completed under section 143, then the Assessing Officer has no jurisdiction to take action after the expiry of four years from the end of the relevant assessment year; unless the assessee fails to disclose fully and truly all material facts necessary for that assessment year. The argument of the learned Authorised Representative of the assessee is that the reasons given by the Assessing Officer for initiating the reassessment proceedings were already before him when the regular assessment under section 143(3) of the Act was completed. The learned Authorised Representative of the assessee also referred to the copy of the letter addressed to the Assessing Officer (Page-7 of the paper b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vi )as the notices were without jurisdiction, the assessee should not be relegated to the alternative remedy, the Department preferred appeals to the Supreme Court. The Supreme Court saw no reason to differ and dismissed the appeals." 4.4 In the case of Kelvinator of India Ltd. ( supra ), the Hon ble Delhi High Court (Full Bench) after discussing all the relevant case laws Pre-amendment as well as Post-amendment to section 147 of the Act and held as under : "We, however, may hasten to add that if "reason to believe" of the Assessing Officer is founded on an information which might have been received by the Assessing Officer after the completion of assessment it may be a sound foundation for exercising the power under section 147 read with section 148 of the Act. We are unable to agree with the submission of Mr. Jolly to the effect that the impugned order of assessment cannot be faulted as the same was based on information derived from the tax audit report. The tax audit report had already been submitted by the assessee. It is one thing to say that the Assessing Officer had received information from an audit report which was not before the Income-tax Officer, but it is an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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