TMI Blog2018 (4) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... harishi, Accountant Member and Shri K. Narsimha Chary, Judicial Member Assessee by: Ms Deepashree Rao, CA Department by: Ms Shefali Swaroop, CIT DR ORDER PER K. NARSIMHA CHARY, JM ITA No.3914/Del/2011 relates to the Assessment Year 2004-05 and ITA No.6078/Del/2013 and Cross Objection No.235/Del/2015 relate to Assessment Year 2007-08. Assessee is Indo Rama Synthetics (I) Ltd. in all these three matters. Since the assessee is same and the question of law is also the same in all these three matters, we find it just and convenient to dispose of them by way of a common order. 2. Facts stated, in brief, are that the assessee, a public limited company, is engaged in the business of manufacturing textiles related yarns. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act in respect of adding back the provision for doubtful debts and advances and provision for diminution in value of investments for computing book profits, on the basis of retrospective amendment made to the provisions of Section 115JB of the Act. 3. In so far as the addition of ₹ 76,47,60,924/- on account of provision for deferred tax liability, the learned AO recorded that in the original assessment proceedings, the deduction of ₹ 76,47,61,000/- pertaining to provision for deferred tax liability was wrongly allowed to the assessee because Finance Bill 2008 through which provisions of Section 115JB are amended. Learned CIT(A) on this aspect placed reliance on the decision reported in M.J. Pharmaceuticals Ltd. vs DCIT, 297 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the Act. The belief that the income chargeable to tax has escaped assessment on account of excessive relief must be based on definite basis. As stated earlier, there is no basis for treating the provision for deferred taxation amounts to unascertained liability covered under Clause (c) of Explanation to Section 115JB of the Act. In fact, during the course of regular assessment, the very same question was raised by the Assessing Officer and the explanation given by the assessee that the provision for deferred taxation cannot be treated as an unascertained liability was accepted by the Assessing Officer. Apart from that the Kolkata Bench in the case of Balarampur Chini Mills Ltd. has taken similar view. Neither the reasons recorded while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... natural justice in terms of the decision of the Hon ble Apex Court in the case of GKN Driveshaft s India P. Ltd. vs ITO, 259 ITR 19. This is a matter of record. 6. Further, the Hon ble Jurisdictional High Court in PCIT VS. Jagat Talkies Distributors [2017] 398 ITR 13, held that: 23. The Revenue does not dispute that there was a failure to furnish the reasons for reopening of the assessment. Therefore, there was a clear violation of the procedure laid down by the Supreme Court in GKN Driveshaft (India) Limited v. ITO (supra). The decision of this Court in Haryana Acrylic Manufacturing Company v. The Commissioner of Income Tax (supra) reiterates that the it is mandatory for the AO to supply reasons for reopening the assessment and thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of an assessment. These recorded reasons as laid down by the Apex Court must be furnished to the Assessee when sought for so as to enable the Assessee to object to the same before the Assessing Officer. Thus, in the absence of reasons being furnished, when sought for would make an order passed on reassessment bad in law. The recording of reasons (which has been done in this case) and furnishing of the same has to be strictly complied with as it is a jurisdictional issue. This requirement is very salutary as it not any ensures reopening notices are not lightly issued. Besides in case the same have been issued on some misunderstanding/misconception, the Assessee is given an opportunity to point out that the reasons to believe as recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X
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