TaxTMI 
TaxTMI 
2014 (1) TMI 947
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct'), assessee had moved in appeal before CIT(Appeals) for both the years. In such appeals, assessee had also assailed the reopening. However, the CIT(Appeals), while adjudicating the appeals, did not deal with the grounds taken by the assessee assailing the reopening. Assessee moved in appeal before this Tribunal and this Tribunal in its order dated 30.6.2011 in I.T.A. No. 984/Mds/2003 and I.T.A. No. 985/Mds/2003 remitted the issue of validity of reopening, back to the file of the CIT(Appeals) for disposal. The CIT(Appeals) thereafter took up this issue pursuant to the directions of the Tribunal. 3. Reasons recorded for reopening for assessment year 1986-87 were as under:- "In the assessment for 1986-87 completed on 28/03/1989, the asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... off should have been restricted after deducting Rs. 3,20,00,000/- in respect of which provision has already been allowed as deduction in the assessment year u/s 36(1)(viia). The Board has also issued a letter in No.204/52/92/ITA.II dated 05/03/1993 clarifying the application of section 36(1)(vii) and 36(1)(viia) of the IT Act. Further, the AG Audit has raised an objection that the bad debts claimed should be adjusted against the credit balance of the provision for bad and doubtful debts created u/s 36(1)(viia) and only the amount of which the bad debts exceeds the provision should be allowed. In view of the above, I have reason to believe that income chargeable to tax has been under-assessed and has been subject to excessive deduction all....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ex Court, which subsequently came to the notice of the Assessing Officer, after the completion of assessments constituted information which justified the reopening. For taking this view, she placed reliance on the decision of Hon'ble Andhra Pradesh High Court in the case of CIT v. Novapan India Ltd. (236 ITR 746) and that of Hon'ble Apex Court in the case of ITO v. Saradbhai M. Lakhani And Another (243 ITR 01). Vis-à-vis the reopening done for assessment year 1989-90, CIT(Appeals) was of the opinion that information given by internal audit party was good and sufficient ground for resorting to a reopening. For this, she relied on the decision of Hon'ble Apex Court in the case of CIT v. P.V.S. Beedies Pvt. Ltd. (237 ITR 13). 6. Now be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt/orders of court were information sufficient for reopening. Reliance was placed on the following decisions:- Kartikeya International v. CIT (All) 329 ITR 539 Chandi Ram v. ITO & Anr. (Raj) 225 ITR 611 Beverley Estates Limited v. CIT (Mad) 117 ITR 302 Maharaj Kumar Kamal Singh v. CIT (SC) 35 ITR 1 R.K.Malhotra, ITO v. Kasturbhai Lalbhai (SC) 109 ITR 537 Central Warehousing Corporation v. ACIT (Del) 51 DTR 198 CIT v. Novapan India Limited (AP) 236 ITR 746 A.L.A. Firm v. CIT (SC) 189 ITR 285 ITO v. Saradbhai M. Lakhani & Anr. (SC) 243 ITR 1 Madras Race Club Charitable Trust v. CIT (Mad) 245 ITR 240 9. We have perused the orders and heard the rival submissions. There is no dispute that re-openings were done after the end of four ye....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the statute. The said Section 147(b) was applicable only upto 31.3.1989, when Section 147 was substituted. Upto 31.3.1989, only two conditions were required to be satisfied for resorting to reopening. First was that A.O. should have information in his possession subsequent to making of original assessment order. The second was that such information should lead to a belief that income chargeable to tax had escaped assessment. There was no requirement that escapement of income should be on account of the failure of the assessee to disclose fully and truly all material facts necessary for the assessment. In other words, proviso to Section 147, as it stands today, was not applicable for a reopening done prior to 31.3.1989 under Section 147(b) ....