TMI Blog2013 (11) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Appellant : Shri Niranjan Kouli, CIT-DR. For the Respondent : Shri Rajan Bhatia, Advocate. ORDER Per I. C. Sudhir, Judicial Member: The Revenue has questioned the first appellate order on the sole ground that the learned Commissioner of Income-tax (Appeals) has erred in law and on facts of the case in quashing the assessment proceedings under section 147/143(3) of the Income-tax Act, 1961 (the Act) initiated by the Assessing Officer. 2. The relevant facts are that the assessee vide its return of income furnished on 28.11.2003 had declared a loss of Rs.6,02,50,937/- for the relevant year. The assessment under sec. 143(3) was framed on 17th March, 2006 wherein the Assessing Officer had accepted the loss as returned. Subsequently a notice under sec. 148 of the Act dated 12th March, 2010 was issued for reopening of the assessment. In response thereto the assessee vide its letter dated 13th April, 2010 stated that the return of income filed under sec. 139(1) for the assessment year under consideration may kindly be considered as return filed in response to the notice issued u/s 148. The assessee vide its letter dated 6.12.2010 objected the reopening of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the original assessment, hence it cannot be alleged that reopening was due to change of opinion by the AO. He submitted that even the claims on its merits were not allowable, hence "change of opinion" will not come to the rescue of the assessee to object the initiation of reopening of the assessment. In support the learned DR cited following decisions:- (i) CIT vs. P.V.S. Beedies (P Ltd. (1999) 237 ITR 13 (SC); (ii) Jawand Sons vs. CIT (2010) 195 Taxman 144 (P H); (iii) Dalmia Brothers (P) Ltd. Vs. CIT (Delhi); (iv) News Light Trading Co. vs. CIT (2002) 256 ITR 391 (Delhi); (v) Peerless General Finance Investment Co. Ltd. Vs. DCIT (2003) 133 Taxman 256 (Cal.); (vi) ACIT vs. Manubhai Sons Co (2007) 18 SOT 297 (Mum.); (vii) ACIT vs. Champdany Industries Ltd. (2005) 95 ITD 169 (Kol.). (viii) Nancy Krafts (P) Ltd. Vs. ACIT (2012) 20 Taxman.Com 163 (Delhi) (ix) Som Dutt Builders (P) Ltd. Vs. DCIT, 98 ITD 78 (Cal.) While concluding his arguments the learned DR asserted that the material information relating to the claimed expenditure and bad debt was not disclosed fully and truly by the assessee during the course of original assessment, hence proviso to sec. 147 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT vs. Autometers Ltd. (2007) 292 ITR 345 (Delhi). (5) CIT vs. TVS Motor Co. Ltd. (2009) 319 ITR 192 (Mad) (6) Supreme Treves Pvt. Ltd. Vs. DCIT (2010) 323 ITR 323 (Bom) (7) Nikhil K. Kotak Vs. Mahesh Kumar (2009) 319 ITR 445 (Guj) The ld. AR also pointed out that in the earlier assessment years and in the assessment year 2000-01 ( TA No. 2594/Del/2010 order dated 17.09.2010) the Tribunal in the case of the assessee has decided the identical issues like provision for warranty / guarantee, and provision for contractual obligation in favour of the assessee, copies of these orders have been furnished. 7. In the present case we have to examine as to whether the requirement of proviso to Section 147 of the Act was fulfilled to justify the objection of the assessee that initiation of reopening proceedings was barred by limitation under proviso to Section 147 of the Act. As per the proviso where assessment u/s 143(3) has been made for the relevant assessment year, no action shall be taken u/s 147 after the expiry of 4 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 the failure on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be considered as irrecoverable u/s 36(i) (vii) of the IT Act and hence the amount of Rs.2,23,30,000/- was not allowable as bad debts which the assessee had claimed. In view of this, I have reason to believe that an amount of Rs.2,23,30,000/- has escaped assessment within the meaning of section 147 of the IT Act, 1961. The escapement of income has been on account of failure on the part of the assessee to truly and fully disclose all the material facts necessary for assessment. In view of the above, I have reason to believe that an amount of Rs.2,23,30,000/- Rs.2,26,95,264/- has escaped assessment within the meaning of section 147 of the IT Act, 1961. Since, the assessment has been completed u/s 143(3) of the Act and period of 4 years has escaped, proposal is hereby submitted along with the relevant assessment record to the Commissioner of Income Tax, Delhi-III, New Delhi for consideration and necessary approval in accordance with the proviso appended with section 151 (1) of the IT Act, 1961 for issuance of notice u/s 148 of the Act." 8. The contention of assessee remained that during the course of original assessment proceedings the Assessing Officer had raised a questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary material facts. It is also undisputed that reasons for initiation of the reopening proceedings have been recorded on the basis of balance sheet furnished with return of income. There is also no dispute that no fresh material on record has surfaced after framing the original assessment dated 17.3.2006 u/s 143(3) of the Act. Under these circumstances we find that the ld. CIT (A) has rightly accepted the objection of the assessee that initiation of reopening proceedings u/s 147 of the Act in the present case after the expiry of 4 years from the end of the relevant assessment year was not valid as per the proviso to Section 147 of the Act since there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for assessment year under consideration. In this regard we also find strength from the decisions relied upon by the ld. AR in the cases of CIT Vs. Kelvinator of India Ltd. (Supra), CIT Autometers Ltd. (Supra) etc. In its decision in the case of Sudhir Gensets Ltd. Vs. ITO (2011) 12 Taxman.com 332 (Delhi). The Hon'ble Delhi High Court has been pleased to hold:- "18. Explanation 1 to the proviso stipulates that mere pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the same could not be said to be a change of opinion to hold the proceedings u/s 147 of the Act as invalid. Thus proviso to Section 147 of the Act was not invoked in the case of Som Datt Builders (P) Ltd. whereas in the present case before us there is no dispute that the original assessment was framed u/s 143 (3) of the Act and 4 years had expired from the end of the relevant assessment year when proceedings for reopening were initiated. Similarly, in the case of Jawand Sons Vs. CIT (Supra) proviso to Section 147 was not invoked. It was held in that case that u/s 147, after its amendment w.e.f. 1.4.1989, wide powers have been given to the Assessing Officer even to cover the cases where the assessee had fully disclosed the material facts. In the case of Dalmia Brothers (P) Ltd. Vs. CIT (Supra) the Hon'ble Delhi High Court had rejected review petition filed by the assessee against the order of the Hon'ble High Court rejecting the contention of the assessee that in the impugned decision Court had relied upon decisions / judgments which were not cited at the time of arguments and that Court had relied upon record produced by revenue but said records were not made available to asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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