9911796707
TMI Blog2013 (11) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... me 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 assessment on the basis that the notice under sec. 148 has been issued after the expiry of a period of four years from the end of the assessment year as per proviso to Section 147 of the Act, hence it is only a change of opinion of the assessing officer, since all the impugned expenditures contained in the reasons recorded were duly examined at the time of original assessment proceedings. The AO rejected the objections raised by the assessee against the reopening and framed the assessment under sec. 147/143(3) of the Act on 29.12.2010 determining total loss at Rs.1,52,25,676/-. In result the Assessing Officer added the claimed expenditure of Rs.38,16,064/- on account of provisions for warranty/guarantee, Rs.1,88,79,200/- claimed on account of provision for contractual obligations and Rs.2,23,30,000/- claimed as bad debt written off. 3. The aggrieved assessee preferred first appeal and the learned CIT(A) being convinced with the contention of the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 are not applicable in the present case. 6. The learned AR on the other hand, tried to justify the first appellate order on the issue. He reiterated the submissions made before the authorities below in this regard. He pointed out that during the course of original assessment proceedings the Assessing Officer had raised a question on the issues of the claimed bad debt and on the provisions of warranty and current liabilities vide item No.12 of the questionnaire, a copy whereof has been made available on the record. He pointed out that the assessee vide letter dated 30,8.2005 had replied the query raised by the AO, relevant contents whereof have been also reproduced by the ld. CIT (A). The ld. AR also referred order sheet entries noted during the original assessment, filed by the ld. DR. in support. He further submitted that the claimed provisions were made as per law and the same were allowable deductions. The Tax Audit Report filed by the assessee was already there o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 the part of the assessee to make a return u/s 139 or in response to a notice issued u/s 142 (1) or Section 148 or to disclose fully and truly all material facts necessary in his assessment in that assessment year. There is no dispute in the present case that reopening proceedings were initiated u/s 147 of the Act after the expiry of 4 years from the end of the relevant assessment year. Now we have to examine as to whether there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment for the year in question. If it is found that there was no such failure on the part of the assessee then only the initiation of reopening proceedings can be held invalid in view of the proviso to Section 147 of the Act. The reasons recorded for initiation of reopening proceedings are as under:- "Return of income was filed on 28/11/2003 declaring total loss at Rs6,02,50.937/-. Assessment in this case was completed u/s 143(3) ON 17/3/2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 question on the issue of the claimed bad debt and on the provisions of warranty and current liabilities vide item no. 12 of the questionnaire. The further contention of the assessee remained that the tax Audit Report filed by the assessee was already there on record on the basis of which reopening of assessment u/s 147 was initiated after recording the reasons. Thus it cannot be alleged that the assessee had not disclosed all the material and relevant facts fully and truly during the course of original assessment, contended the assessee. The further contention of the assessee on merits of all the additions remained that the bad debt is required to be written off only in the books which was properly done by the assessee as per the provisions of the law. It was submitted further that liquidated damages was also allowable to the assessee. The contention of the ld. AR remained that approval for adjustment of Rs.4,31,24,147/- on account of settlement of MECON for RSP Modernization Project (Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts 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 production of books of account and other material from which the Assessing Officer could with due diligence, have discovered escaped income, does not bar reassessment proceedings. This does not amount to disclosure. The aforesaid explanation does not help the Revenue in the present case. As noticed above, the material facts were fully and truly disclosed. Further inference, or new discovery of facts by exercise of due diligence, is not the error or ground made out by the Revenue. The alleged error or mistake pointed out by the Revenue is the failure to apply the law, i.e., provision of sub-section (13) to section 80-IB, to the known and accepted facts. The Assessing Officer, as per the Revenue, did not examine and consider whether there was compliance or violation of section 80-IB (13) and Rule 18 BBB of the Rules, inspite of known and accepted facts recorded in the first / original assessment order. The petitioner was not required to "disclose" the law. The proviso and explanation dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision 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 assessee and it was not aware of audit objection. The Hon'ble High Court held that the Courts do and can rely upon judgments which are not cited but are relevant to issue in controversy. In that case there was non-disclosure of primary facts on the part of the assessee hence the proceedings initiated u/s 147 were held valid. Again in the case of Peerless General Finance and Investment Co. Ltd. Vs. DCIT (Supra) there was non-disclosure of primary facts and thus proceeding initiated u/s 147 were held valid. Similarly in the case of ACIT Vs. Champdany Industries Ltd. (Supra) proviso to Section 147 of the Act was not invoked and the proceedings initiated u/s 147 were held valid on the basis that full and true stress with regard to claim deduction u/s 80HHC were not furnished by the assessee at the time of original assessment. Likewise in the cases of Nancy Krafts (P) Ltd. Vs. ACIT (Supra), Kalyanji Mavji and Co. Vs. CIT (Supra) no objection was raised as per proviso to Section 147 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
