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TMI Blog2013 (11) TMI 1628X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 143(1) on 31.12.2005. Subsequently, a notice under section 148 was issued on 07.01.2008. The present was completed under section 143(3) read with section 147. As the assessee society is under liquidation, the notice was served on the Official Liquidator. During the course of assessment certain additions were made by A.O. such as assessee is not eligible to avail benefit u/s. 80P of the I.T. Act, Provision towards NPA debited to the P & L a/c. disallowed Rs. 12,52,52,762/- and addition towards Contingent provision on standard assets not allowed Rs. 1,98,392/-. 3. Aggrieved, the assessee filed an appeal before the CIT(A). During the hearing of the appeal, the learned A.R. filed a petition for admission of the following additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out that as stated by the AO, the return filed by the assessee originally in this case, was merely processed by the A.O. u/s.143(1) of the Act. No scrutiny assessment has been made earlier. Further, the A.O. can reopen the assessment in a case, so long as there exist reasons for the same. In the instant case, the A.O. has already briefly referred to the reasons for reopening the assessment in this case in the assessment order. Further, the CIT(A) held that from the reasons recorded by the A.O. lying in the assessment record, it is seen that he has clearly made out a case as to how income chargeable to tax for the assessment year 2005-06, has escaped assessment in this case and the source of information for coming to such conclusion on the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O. is in accordance with law." 8. Before the Tribunal, the learned Counsel for the assessee Sri C.P. Ramaswamy submitted that the learned Commissioner of Income Tax ought not to have held that the notice issued under section 148 by the A.O. is in accordance with the law. The learned Counsel drew our attention to the reasons recorded by the A.O. vide his letter dated 24.11.2008 addressed to the assessee-bank, which reads as under : "In computing the profit, the assessee debited an amount of Rs. 19,52,52,762/- to the profit and loss account towards NPA provision. In view of the cancellation of licence by the Reserve Bank of India, the assessee is not entitled for allowance of provision under sub-section (viia) of section 36 of the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mum.). 10. The learned D.R. on the other hand, relied on the Judgment of the Hon'ble Supreme Court in the case of ACIT vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd. (2007) 291 ITR 500 (S.C.). 11. We have heard both the parties and perused the material available on record. We find that in the case of Ranjit Reddy vs. Dy.CIT, Hyderabad (2013) 144 ITD 361 the Coordinate Bench of this Tribunal has dwelled on the contention of the assessee that reopening of the assessment is not permissible as there is no tangible material. The relevant portion of the Order is reproduced hereunder : "One needs to give a schematic interpretation to the words 'reasons to believe' failing which, section 147 would give arbitrary power to Assessing Officer to reopen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the belief of the Assessing Officer that income chargeable to tax had escaped assessment and in the absence of any fresh tangible material, he came to the conclusion that it was not permissible for the Assessing Officer to reopen the assessment. The learned Accountant Member, however, took a different view relying on the decision of Hon'ble Supreme Court in the case of Rajesli Jhaveri Stock Brokers (P) Ltd. (supra) and the matter, therefore, was referred to a Third Member for resolving inter alia, the following point of difference :- "Whether on the facts and circumstances of the proceedings initiated by the A.O. u/ s 147 is liable to be confirmed or quashed when there was no fresh material available with the AO and the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case where only an intimation had been issued u/s 143(1)(a), it is essential that the Assessing Officer should have before him tangible material justifying his reason to believe that income had escaped assessment. Since there was no such tangible material before the AO from which he could entertain the belief that income of the assessee chargeable to tax had escaped assessment, the Third Member held that reassessment proceedings initiated by the Assessing Officer were liable to be quashed on the ground that there was no tangible material before the Assessing Officer even though the assessment was completed originally u/s. 143(1). In our opinion, the Third Member decision of the Tribunal in the case of Telco Dadajee Dhackjee Ltd. (supra) is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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