TMI Blog2009 (9) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... The present appeal at the instance of the Revenue under section 260A of the Income-tax Act, 1961 (hereinafter referred to as "the Act") is against the order of the Tribunal dated March 16, 2007, in Income-tax Appeal No. 138/Luck/2005 for the assessment year 1996-97. 2. The brief facts of the case are that the assessee-opposite party (hereinafter referred to as "the assessee") was a company and was a recognized financial institution. The assessee derived income from interest on finances and financial assistance given to medium and large scale industries in U.P. It also derived income from dividend, securities, deposits, leasing operations, sale of shares and office premises, etc. The assessee filed return of income on November 29, 1996, declaring total income at Rs. 2,07,07,980. The return was processed under section 143(1)(a) of the Act on November 17, 1997, determining income at Rs. 2,13,88,621 after making certain adjustments. Subsequently, assessment order under section 143(3) of the Act was passed on January 4, 1999, assessing total income at Rs.3,93,64,880. It is relevant to state that the assessee claimed deduction under section 36(1)(iii) of the Act and the same was all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order dated March 23, 2004 denying the deduction claimed by the assessee under section 36(1)(viii) of the Act. Being aggrieved by the assessment order, the assessee filed appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) has confirmed the order of the Assessing Officer. Being further aggrieved, the assessee filed the appeal before the Tribunal. The Tribunal by the impugned order allowed the appeal and set aside the reassessment order passed under section 147 read with section 143(3) of the Act. The Tribunal held that reopening of the proceeding was barred by limitation. The findings of the Tribunal are as follows : "It is evident from the proviso to section 147 of the Act that if an assessment is made under section 143(3) of the Act for the relevant assessment year, no action can be taken for reopening of such assessment after expiry of four years from the end of the relevant assessment year unless any income chargeable to tax has escaped assessment for such assessment year by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for that assessment year. There is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew that the same analogy is applicable in the case before us that the Assessing Officer, when passed assessment order under section 143 of the Act, had considered with due application of mind the claim of the assessee under section 36(1)(viii) of the Act. Not only this, we observe, as mentioned hereinabove, that there is no averments by the Department in the reasons recorded that there was any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment for that assessment year and hence we are of the considered view that the proviso to section 147 of the Act will be applicable. Since notice issued under section 148 of the Act has been issued after expiry of four years from the end of the relevant assessment year under consideration, we are inclined to accept the contention of the assessee that the said notice was barred by limitation and thus subsequent proceedings are also bad in law. In view of the above, we hold that initiation of reassessment proceedings by the Assessing Officer under section 148 of the Act is not a valid assessment being barred by limitation and consequently the assessment order passed pursuant to the said notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has escaped assessment." 8. Admittedly, notice under section 148 of the Act was issued after the expiry of four years. The notice under the proviso of section 147 of the Act can be issued after the expiry of four years only in case where income chargeable to tax has escaped assessment by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year. From the perusal of the reason recorded it is apparent that no case has been made out that the assessee had failed to disclose fully and truly all material facts necessary for his assessment and no observation has been made in this regard. On the basis of the same material which was available on record, the assessing authority was of the view that the deduction had been wrongly allowed under section 36(1)(viii) of the Act. The Tribunal observed that the assessee had furnished the requisite details in respect of leasing income and upfront fee as received in the assessment year under consideration and the same was duly disclo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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