Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2017 (9) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (9) TMI 1765 - HC - Income TaxReopening of Assessment - notice on an overruled judgment - proceeding initiated against the appellant relying on the decision of Madhya Pradesh Cooperative Bank Ltd. Vs. Addl. CIT [1996 (1) TMI 8 - SUPREME COURT] - Held that:- It is really shocking that the date on which the notice was issued on a judgment which is sought to be relied on was overruled by the decision of Supreme Court in the case of CIT Vs. Karnataka State Cooperative Bank [2001 (8) TMI 9 - SUPREME COURT] therefore notice issued under Section 147/148 was based on the judgment which was overruled. In that view of the matter, there is no basis for issuing the notice. However, in view of the decision of this Court in the case of CIT Bikaner Vs. Shri Ram Singh (2008 (5) TMI 200 - RAJASTHAN HIGH COURT), it is very clear that the authority could not have travelled the notice under Section 147. Further, counsel for the respondent contended that the judgment of this Court is required to be considered in view of the Explanation 3 of Section 147 which came into force w.e.f. 2009, the amendment which has been added w.e.f. 1.4.1889. However, it will not be out of place to mention here that the notice was issued on 11.3.2003. This explanation was not there at that time. In that view of the matter, we are not giving any comment whether the impugned jurisdictional judgment will apply or not and when the notice was issued, this explanation was not there. Assessing Officer has not only committed very serious error in issuing the notice on an overruled judgment but has also committed serious misconduct. Inasmuch as, in spite of the pointing out the judgment rendered by the Karnataka High Court came subsequently and has overruled the M.P. High Court judgment, the proceedings ought to have been closed. However, not only the Assessing Officer but the CIT(A) and the Tribunal have not taken into consideration this note. The issue under Section 147 based on an overruled judgment is required to be answered in favour of the assessee. Additions towards non-recoverable interest on NPA debts u/s 43D - Held that:- As relying on the decision of the Supreme Court in the case of T.R.F. Ltd. Vs. Commissioner of Income Tax reported in (2010 (2) TMI 211 - SUPREME COURT) AO has not examined whether the debt has, in fact, been written off in accounts of the assessee. When bad debt occurs, the bad debt account is debited and the customer's account is credited, thus, closing the account of the customer. In the case of Companies, the provision is deducted from Sundry Debtors. As stated above, the Assessing Officer has not examined whether, in fact, the bad debt or part thereof is written off in the accounts of the assessee. This exercise has not been undertaken by the Assessing Officer. Hence, the matter is remitted to the Assessing Officer for de novo consideration of the above-mentioned aspect only and that too only to the extent of the write off.
|