TMI Blog2011 (10) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... at the payment of the balance was to be made in accordance with the settlement terms. Thus the condition precedent to the invocation of the jurisdiction is clearly absent - in favour of assessee. - Writ Petition No. 1634 of 2011 - - - Dated:- 20-10-2011 - D.Y. Chandrachud, A.A. Sayed, JJ. F.B. Andhyarujina, Sr. Adv., with Atul K. Jasani for the Appellant Suresh Kumar for the Respondent JUDGEMENT D.Y. Chandrachud: 1. Rule, by consent returnable forthwith. With the consent of Counsel and at their request, the Petition is taken up for hearing and final disposal. 2. In these proceedings under Article 226 of the Constitution the Petitioner has challenged the validity of a notice dated 29 March 2011 issued by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cost of Rs.20,58,24,991/- is credited by the Company to Work in Progress Account, to that extent the company has contingent liability the amount of which is unascertainable." Schedule M-5 to the Balance Sheet which was entitled 'Finance Cost' inter alia reflected interest and other finance charges. The interest waiver which was written back on debt restructuring was similarly disclosed. 4. The Petitioner filed a return of income for Assessment Year 2004-05 on 28 October 2004 and disclosed a business loss of Rs.7.10 Crores. The return was accompanied by a tax audit report along with an audited balance sheet and a profit and loss account. As noted earlier, the Petitioner disclosed the transaction of financial restructuring with the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dged on 20 June 2011 have been disposed of on 25 July 2011. 7. Counsel appearing on behalf of the Petitioner submitted that - (i) The reopening of assessments has taken place beyond a period of four years of the end of the relevant financial year; (ii) There was no failure on the part of the Petitioner to disclose fully and truly all the material facts relating to the assessment for that year; (iii) This is evident from Schedule M-5 to the accounts as well as Note (3)e of Schedule P; (iv) As a matter of fact in his order dated 25 July 2011 the Assessing Officer has noted that the assessee had offered the interest part of the loan waived by the bank as income, but sought to change the reasons originally recorded by contending that the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be made in accordance with the settlement terms. The power of the Assessing Officer to re-open beyond a period of four years is even more restricted than when the reopening takes place within a period of four years of the end of the relevant Assessment Year. In the present case, the condition precedent to the invocation of the jurisdiction is clearly absent since there is not even an averment to the effect that there was a failure on the part of the assessee to disclose fully and truly all the material facts necessary for the assessment. 11. In the circumstances, for the reasons indicated the Assessing Officer has clearly acted in excess of jurisdiction in purporting to reopen the assessment, beyond a period of four years for Assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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