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2023 (8) TMI 727 - HC - Income TaxReopening of assessment u/s 147 - Bad Debts Written Off claimed as deduction, Computation of MAT liability u/s 115JB and Disallowance u/s 14(A) - HELD THAT:- A perusal of the reasons for reopening set out in the said letter show that there is no such failure on the part of the Petitioner to disclose fully and truly any material fact necessary for the Assessment. The reasons so recorded themselves clearly show that, even according to Respondent No. 1, there was no failure to disclose any material fact. According to Respondent No. 1, on the facts disclosed by the Petitioner during the assessment proceedings, it had wrongly claimed and was allowed a deduction towards Bad Debts Written Off. Further, Petitioner clearly showed that the Petitioner had in response to specific queries raised during the assessment proceedings, disclosed to the Respondents all the material facts in respect of Bad Debts Written Off. Therefore, the reason given by Respondent No. 1 in the said letter dated 23rd July 2021 for reopening the reassessment in respect of Bad Debts Writing Off cannot be a reason to reopen the Assessment under Section 148 of the Act. Computation of MAT liability under Section 115JB - A perusal of the reasons given clearly show that there is no failure on the part of the Petitioner to disclose any material fact. In fact, Respondent No. 1 records that the “incorrect application of provisions of the Act by the Department resulted in under assessment of income of Rs. 50,99,00,000/- with a consequent short levy of tax of Rs. 10,68,77,590/-”. This itself shows that there is merely a change of opinion on the part of Respondent No. 1 and no failure to disclose any material fact on the part of the Petitioner. In letter in response to specific queries raised during the assessment proceedings, the Petitioner had given the computation in respect of of MAT liability. This once again shows, that the Petitioner had disclosed all material facts in respect of computation of MAT liability and there was no failure on its part to disclose any material fact. Disallowance under Section 14A - In paragraph 4 of the Assessment Order passed u/s 143(3) of the Act, the Assessing Officer had discussed in detail this disallowance under Section 14A and had passed orders in respect thereof. This, by itself, shows that there is no failure on the part of the Petitioner to disclose any material fact in respect of the disallowance u/s 14A - Further, Petitioner has given the facts and the reasons as to why no disallowance can be made under Section 14A of the Act, except disallowance of 1% of exempt income considered by the Petitioner as an administrative expenditure relating to exempt income. Thus, the said Assessment Order and the said letters once again clearly show that there is no failure on the part of the Petitioner to disclose any material fact even in respect of the issue of disallowance under Section 14A of the Act. Thus reopening of assessment quashed - Decided in favour of assessee.
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