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TMI Blog2011 (11) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... hat Assessment Year." The contention of the Assessee which would need to be considered is that the reasons which have been disclosed for re-opening the assessment ex-facie do not contain any reference to a failure on the part of the Assessee to disclose fully and truly all material facts necessary for the assessment. On the other hand, according to the Revenue, the Assessing Officer was acting within his jurisdiction in purporting to re-open the assessment after the expiry of four years of the end of the relevant Assessment Year. 4. The Petitioner filed its return of income for Assessment Year 2003-04 on 28 November 2003. A revised return of income was thereafter filed on 11 January 2005 and 31 March 2005. The Assessing Officer issued several questionnaires on 3 August 2005, 6 December 2005 and 30 December 2005. The Assessee filed its replies on 18 November 2005, 5 December 2005, 23 December 2005 and 20 January 2006. The Assessing Officer passed an order of assessment on 28 February 2006. 5. During the course of the assessment, the Assessee had made a claim under Section 10(23G) in the total amount of Rs. 124.71 crores. The Assessing Officer allowed the claim to the extent of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und that the assessee has claimed Bad Debts at Rs. 733.31 crores. However, in the NPA return furnished by the assessee to the Reserve Bank of India, the Bad Debt is only Rs. 152.52 crores. Thus, there is excess claim of Bad Debt of Rs. 580.79 crores resulting into short levy of tax of Rs. 213.44 crores. In view of the above, I have reason to believe that the income aggregating to Rs. 592.66 crores (Rs. 8.12 cr + 580.79 cr.) has escaped assessment resulting into short levy of tax." 7. Learned Senior Counsel appearing on behalf of the Assessee, in assailing the notice for re-opening the assessment submitted that (i) Ex-facie the reasons which have been recorded by the Assessing Officer do not contain even an allegation that there was a failure on the part of the Assessee to fully and truly disclose all the material facts necessary for the assessment. The reasons do not show any failure on the part of the Assessee to make a full and true disclosure; (ii) Consequently, condition precedent for the exercise of the jurisdiction to re-open an assessment beyond the period of four years of the end of the relevant Assessment Year under the first proviso to Section 147 has not been fulfilled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecember 2005 and 30 December 2005. In the first notice dated 3 August 2005, the Assessing Officer called upon the Assessee to furnish details of the bad debts, the amounts advanced, duration of the debts outstanding and steps taken to recover the bad debts. In the communication dated 6 December 2005, the Assessee was inter-alia called upon to make a disclosure in respect of the following matters :- "1. The examination of the statement giving details of bad debts written off shows that the information/details furnished so far are incomplete. You are requested to furnish the information party-wise in all cases in the chart form as follows : (i) Complete name and the latest postal address of the party in the same column. (ii) Principal amount write off. (iii) Interest and other charges write off. (iv) Total write off. (v) Total loan disbursed. (vi) Amount recovered in subsequent years (year-wise). (vii) Outstanding amount as on 31.03.2003. (ix) Proper supporting documentary evidences regarding the reasons for its inability to recover the loan and the interest amount and the steps taken for recovery. Please note that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench has observed as follows :- "The reasons recorded by the Assessing Officer nowhere state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. It is needless to mention that the reasons are required to be read as they were recorded by the Assessing Officer. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the Assessing Officer to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the Assessing Officer to reach the conclusion as to whether there was failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the concerned assessment year. It is for the Assessing Officer to form his opinion. It is for him to put his opinion on record in black and white. The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. The reasons are the manifestation of the mind of the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of parties where the income had been exempt under Section 10(23G). The case of the Revenue is that since the Assessee had claimed a benefit of Section 10(23G), it could not to that extent have claimed a write off under Section 36(1)(vii). 17. In this regard, it needs to be noticed that the second proviso to Section 147 stipulates that the Assessing Officer may assess or re-assess such income other than the income involving matters which are the subject matter of any Appeal, Reference or Revision, which is chargeable to tax and has escaped assessment. In the present case, it has emerged from the affidavit in reply of the Revenue that the Assessee had filed an Appeal to the CIT(Appeals) against the order of assessment. Paragraph 4(v) of the reply states that by his order dated 29 September 2010, the CIT (Appeals) partly allowed the Appeal filed by the Petitioner by accepting the claim under Section 36(1)(vii) and Section 36(1)(viii) and by allowing a proportionate deduction under Section 10(23G) on the basis of the ratio adopted in the earlier Assessment Years. That being the position, in view of the clear provisions of the second proviso to Section 147, the Assessing Officer cannot ..... 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