TMI Blog2014 (2) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 of the Act was beyond the period of four years and the reasons recorded by the AO nowhere stated that there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for that assessment year - the AO himself admitted that the provision for pension liability and deduction under Chapter VI-A had been wrongly allowed - So it cannot be said that it was wrongly allowed on the mistake of the assessee particularly, when all the figures and material was truly disclosed by the assessee – thus, the reopening beyond four years by issuing notice u/s 148 of the Act was bad in law and the learned CIT(A) rightly cancelled the assessment framed by the AO on 30.12.2003 – there is no reason to interfere in the findings of the CIT(A) – Decided against Revenue. - ITA No. 8580/Mum/2010, CO No. 152/Mum/2012 - - - Dated:- 12-2-2014 - Shri N. K. Saini, AM And Shri Sanjay Garg, JM,JJ. For the Petitioner : Shri A. C. Tejpal For the Respondent : Shri F. V. Irani ORDER Per N.K.Saini (AM) : The appeal by the department and the cross objection by the assessee are directed against the order dated 17.09.2010 of the Commissioner of Income-tax (Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) of the Act was completed on 25.02.2000 determining the total income at Nil and the book profit at Rs.39,10,70,913/-. Against this order the assessee filed an appeal before the learned Commissioner of Income-tax (Appeal) [" CIT(A)" for short], who vide order dated 27.03.2003 allowed the write off of bad debts in determining the book profit as claimed by the assessee and after giving appeal effect the total income was determined at a loss of Rs.66,18,08,569/- and book profit taken at Nil u/s 115JA of the Act. Thereafter the Assessing Officer [" AO"for short] reopened the assessment by issuing a notice u/s 148 of the Act on 24.09.2003 and disallowed the excess loss, payment of pension and bad debts. The assessee preferred an appeal before the learned CIT(A) and submitted that the reopening of assessment u/s 148 of the Act was bad in law as the original assessment was already completed after scrutiny u/s 143(3) of the Act. It was further stated that there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. It was contended that the reasons for reopening of the assessment for the captioned assessment year were as fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of India Ltd. (320 ITR 561) (SC) (iii) Asian Paints Ltd. v. DCIT (308 ITR 195) (Bom.) (iv) CIT v. M/s.Eicher Ltd. (294 ITR 310) (Del.) (v) German Remedies Ltd. v. DCIT (285 ITR 26) (Bom.) (vi) Hari Iron Trading Co. v. CIT (263 ITR 437) (P H) 5. The learned CIT(A), after considering the submissions of the assessee, observed that the period of four years expired on 31.03.2002 whereas the notice u/s 148 was issued on 24.09.2003, which was barred by time limitation as per the proviso to section 147 of the Act, which provides that no notice u/s 148 could be issued unless any income chargeable to tax had escaped assessment by reason of the failure on the part of the assessee to make a return u/s 139 or in response to notice issued u/s 142(1) or section 148 of the Act or to disclose fully and truly all material facts necessary for assessment. The learned CIT(A) further observed that in this case the AO had not pointed out any material which the assessee had not disclosed during the course of original assessment. Therefore, the issue of notice u/s 148 of the Act was bad in law. Reliance was placed on the case of CIT v. Kelvinator of India Ltd. (256 ITR 1). Accordingly reassessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the revised return. 2. Provision for Pension Liability has been wrongly allowed of Rs.11,00,50,635/-. 3. Chapter VIA deduction has been wrongly allowed of Rs.74.51 lakhs. The aforesaid resulted in escapement of income by reasons of the failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment of the income." 8. In this case it is an admitted fact that reopening of the assessment was beyond the period of four years from the original assessment completed u/s 143(3) of the Act and in the reasons recorded nothing is brought on record that there was a failure on the part of the assessee to disclose fully and truly all material facts. The assessee in the revised return corrected the mistake related to business loss which was earlier taken at Rs.15,374.16 lakh instead of Rs.12,587.79 lakh. So it cannot be said that the assessee did not disclose the correct figure of the business loss. Therefore, the reopening on the basis of aforesaid ground no.1 was not justified. Similarly provision for pension liability was allowed by the AO on the basis of the judgment of the Hon' ble Supreme Court while framing the original assessment. So it c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision for pension liability was allowed by the AO himself only after thorough examination and scrutiny of the case. Therefore, from the reasons recorded, it is crystal clear that the AO himself admitted that the provision for pension liability and deduction under Chapter VI-A had been wrongly allowed. So it cannot be said that it was wrongly allowed on the mistake of the assessee particularly, when all the figures and material was truly disclosed by the assessee. Therefore, the reopening beyond four years by issuing notice u/s 148 of the Act was bad in law and the learned CIT(A) rightly cancelled the assessment framed by the AO on 30.12.2003. We do not see any valid ground to interfere with the findings of the learned CIT(A). 12. As regards the cross objection, the learned Counsel for the assessee submitted that it should be treated as infructuous in case the appeal of the department is dismissed. Since in the former part of this order we have dismissed the appeal of the department, therefore, the cross objection is dismissed as infructuous by accepting the plea of the learned Counsel for the assessee. 13. In the result, appeal of the Revenue and the cross objection by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
