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2016 (4) TMI 218 - MADRAS HIGH COURT

2016 (4) TMI 218 - MADRAS HIGH COURT - TMI - Reopening of assessment - AO completed the original assessment under Sections 8(2) read with 15 of the Interest Tax Act, 1974 on 7.3.2000, for the assessment years 1996-97 and 1997-98 - Held that:- The nature of the omission on the part of the assessee was indicated in the notice for reopening the assessment as an omission to indicate the nature of the discounting charges. The amount, in respect of which, the assessee claimed exemption, related to dis .....

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sh full and true information.

Admittedly, the assessee made a disclosure about the amount, in respect of which, they were making a claim under the heading 'bill discounting charges'. Since it is a scrutiny assessment, the Assessing Officer was obliged to consider the accounts, documents and evidence before passing the orders of assessment. Normally, it is presumed that an officer entrusted with a statutory function, carries it out in accordance with law unless it is assailed to be not .....

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Dated:- 9-3-2016 - V. Ramasubramanian And N. Kirubakaran, JJ. For the Appellant : Mr. T. Ravikumar For the Respondent : Mr. R. Vijayaraghavan for M/s.Subbaraya Iyer JUDGMENT Both these appeals, filed by the Revenue under Section 260A of the Income Tax Act, were admitted on 10.10.2007 on the following substantial question of law: "Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that the reopening of the assessment made .....

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ssessee is engaged in the business of leasing and financing. The Assessing Officer completed the original assessment under Sections 8(2) read with 15 of the Interest Tax Act, 1974 on 7.3.2000, for the assessment years 1996-97 and 1997-98. 4. Subsequently, the Assessing Officer claimed to have noticed that an amount of ₹ 1,56,58,618/- has been claimed as exempt on the ground that the same represented bill discounting charges for the assessment year 1996-97. Similarly, it was also noticed th .....

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s), forcing the Revenue to take the matter on second appeal to the Income Tax Appellate Tribunal. The Tribunal dismissed the the appeals in I.T.A.Nos.46 and 47/Mds/2005 relating to the assessment years 1996-97 and 1997-98, forcing the Revenue to come up with the above appeals. 6. Admittedly, the reopening of assessment was made beyond four years. Therefore, it was claimed in the notice for reopening the assessment that there was an omission on the part of the assessee to make a full and true dis .....

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The Department perceived that this distinction between a discount on treasure bills and discounting charges was omitted to be brought to the notice of the Assessing Officer, entitling the Assessing Officer to reopen the assessment after four years on the ground of failure to furnish full and true information. 8. But, as rightly pointed out by the Tribunal, the case on hand was actually a scrutiny assessment. It was done under Section 8 of the Interest Tax Act, 1974. Sub-Sections (1) and (2) of .....

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