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2022 (8) TMI 1094 - HC - Income TaxReopening of assessment u/s 147 - Computation of book profit u/s 115JB - loss available was a sum of Rs.50.52 Crores and no book loss or depreciation was available to be deducted under Section 115 JB - HELD THAT:- It is a well settled position that in cases of reopening beyond the period of four years from the end of the relevant assessment year, the statutory pre-condition set out in the proviso to Section 147 of the Act must first be complied with prior to invoking the benefit under the Explanations. It is an equally well settled rule of construction that the interpretation of a statutory provision, must be in the sequence in which the sub-sections and clauses are arranged. Thus the construction of Section 147 is relevant and must be appreciated and applied in seriatim. The proviso is placed at the first instance and the Explanations thereafter and this would mean that the statutory condition and burden cast upon the Department by virtue of the first proviso must first be discharged by the officer, before he proceeds to avail benefit of the deeming explanations that follow thereafter. The test would thus be as to whether the disclosure made by the petitioner at the time of original assessment was full and complete. There is no dispute in this regard and all material in regard to the computation of tax under the provisions of MAT were available before the Assessing Authority. The reasons proceed on the basis that the methodology for computation is erroneous which premise, as noticed earlier, does not appear to be correct as the financials disclose the availability of depreciation. In such circumstances, the assumption of jurisdiction under Section 147 is held to be bad in law. Also find force in the submission that there is no allegation in the reason itself to the effect that there has been any incomplete disclosure or false statement made at the time of assessment that would justify the assumption of jurisdiction beyond the period of four years. The petitioner also raises the argument that the impugned proceedings are based on an audit objection though none of the documents on record would evidence this position. However, there is an averment in the affidavit to this effect and the counter filed by the respondent does not specifically deny this. Even on this score and following the settled position that an audit objection does not satisfy the requirement of the Assessing Officer having an independent ‘reason to believe’ that income has escaped assessment, that too after the elapse of nearly six years from the end of the relevant assessment year, the impugned proceedings are vitiated. - Decided in favour of assessee.
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