TMI Blog2019 (11) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... isions), the jurisdiction of the AO is ousted even if the proposed disallowance of expenditure by the AO under normal provisions is sustained. We are not in a position to take any indulgence at the plea of the Department for maintainability of re-assessment notice and re-assessment order having regard to legislative fiat by way of Explanation 2 to Section 147 of the Act referred to and relied upon. Needless to say, Article 141 of the Constitution embodies the rule of precedent. All the subordinate courts are bound by judgment of the High Courts. Thus, governed by the decision of the Hon ble Gujarat High Court as noted above, we find merit in the plea raised by the assessee by way of its additional grounds of appeal. The re-assessment not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the additional ground raised by the assessee goes to the root of the matter as it seeks to question the validity of the proceedings itself for which relevant facts are also found on the record itself. Thus, the leave of the Tribunal to admit the additional ground for adjudication in terms of Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963 deserves to be granted. The additional ground thus stands admitted. 4. As noted earlier, the additional ground seeks to challenge the validity of re-assessment notice itself as well as the re-assessment proceedings and thus seeks to challenge the jurisdictional aspect and hence, goes to the root of the matter. Therefore, the additional ground raised by the assessee requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stands at ₹ 113.09 Crores. It was submitted that in the background of these facts, where the tax liability under s.115JB of the Act overrides the liability under normal provisions, no escapement can be envisaged. It was thus contended that re-assessment notice is without authority of law and re-assessment order is bad in law in view of the decision of the Hon ble Gujarat High Court in the case of India Gelatine and Chemicals Ltd. vs. ACIT (2014) 364 ITR 649 (Guj) which principles have been followed in Motto Tiles (P.) Ltd. vs. ACIT (2016) 386 ITR 280 (Guj). It was pointed out in conclusion that even if entire amount of disallowances made by the AO on account of prior period expenses is sustained, there would be no addition to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure and consequently, understated the assessed income. In this scenario, the case of the assessee clearly falls within the sweep of Explanation 2 below Section 147 of the Act which envisages escapement of income in the circumstances specified therein. The learned DR for the Revenue thus contended that the express provisions of statute requires to be accorded primacy and no other interpretation in deviation thereof is called for. 7. We have carefully considered the rival submissions. The limited controversy raised by way of additional ground whereby the Tribunal has been called upon to adjudicate as to whether re-opening under s.147/148 of the Act in maintainable where tax liability as per book profits computed under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner had already paid much higher tax and had allowed the petition. It appears that the revenue has accepted the said decision and has not challenged the same before the higher forum. The learned counsel for the respondent has urged that the decision requires reconsideration. Having regard to the facts and circumstances of the case, as well as the fact that the revenue has accepted the said decision, the court does not find any reason to refer the matter for consideration to a Larger Bench. 12. In the light of the decision of this court in the case of India Gelatine and Chemicals Ltd. (supra) having regard to the fact that even if the entire amount which is proposed to be added by the Assessing Officer is sustained ..... X X X X Extracts X X X X X X X X Extracts X X X X
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