TMI Blog2020 (7) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... ged his opinion with respect to the rate of depreciation. He merely applies 25% rate of depreciation instead of 60% as applied in original assessment proceedings. It is apparent that the AO has not pointed out that what facts were not disclosed by the assessee. AO also not brought on record any specific information, which the assessee has failed to disclose in the original return. No infirmity in the order of the CIT (A) in stating that reopening is barred by limitation and the period of six years for reopening is not available to the assessee. CIT (A) is also correct in deciding that in absence of any failure on part of the assessee, extended limitation period of six years cannot be available to the ld AO; therefore, the reassessment order is passed beyond limitation. No infirmity, as argued by CIT DR, in the order of ld CIT (A). In absence of any failure on the part of the assessee, accordingly, we dismiss the appeal filed by the AO on the limited issue that order passed by the ld AO is barred by limitation. Ground No. 1 is dismissed. - ITA No. 6079/Del/2016 - - - Dated:- 21-7-2020 - Shri Amit Shukla, Judicial Member And Shri Prashant Maharishi, Accountant Member For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made at ₹ 29538754390/- as per order dated 30.12.2008. Subsequently, pursuant to the order of the ld CIT(A), appeal effect order was passed on 31.08.2012 recomputing taxable income of the assessee at ₹ 29484371681/-. 4. Subsequently the ld AO issued notice u/s 148 of the Act on 25.03.2013. In response to that, the assessee submitted a letter dated 30.04.2013 stating that the last return filed by it on 15.02.2008 may be treated as return filed in response to the above notice. The assessee on 06.12.2013 requested copy of the reasons recorded which was provided on 06.12.2013. On 18.12.2013 the assessee filed its objections stating that the notice is issued after the expiry of four years from the end of the relevant assessment years without pointing out that escapement of income is by the reasons of failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment. The contention of the assessee was that there was full and true disclosure by assessee in return filed as well as during the original assessment proceedings. The ld AO disposed off the objections vide para No. 4 of the assessment order itself. After that, the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of 25% , they being intangible assets resulting in excess allowance of depreciation of ₹ 3,96,82,225/-. 5. There is a calculation mistake in computing disallowance u/s 14A as per Rule 8D leading to under assessment of income by ₹ 15,95,25,319/- on this count. I have, therefore, reason to believe that by reason of failure on the part of the assessee to disclose fully and truly all material facts for the said year necessary for the assessment of the said year, the income to the extent of more than ₹ 30,47,90,051/- has escaped assessment. As in view of reasons cited above, the CIT also, having been satisfied that it is a fit case for the issue of notice u/s 148 has conveyed his approval/sanctioned for issue of notice vide F.No. CIT/LTU/2012-13/1692 dated 25.03.2013, the proceedings u/s 147 are hereby initiated to assess the income chargeable to tax which has escaped assessment by issuing Notice u/s 148 of the Act. 4.2 The appellant filed objections against the said reopening vide letter dated 18.12.2013 which have been disposed off by the AO in the assessment order itself. The said objections have been disposed off vide para 4 and 4.1 of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts necessary for its assessment. As per the appellant all the issues were examined and all the corresponding facts were disclosed before the AO at the time of original assessment proceedings and, therefore the notice u/s 148 is void-ab-initio. The appellant further submitted that on the two issues out of five issues on which the assessment has been reopened i.e. the issue of CSR expenses and the issue of depreciation on Software Licenses and order u/s 263 was passed by the CIT in A.Y. 07-08 (immediately succeeding year) on 24.02.2012, wherein the CIT dropped the issue of depreciation on software licenses. For reference para 11 of the said order is reproduced herein under:- 11. I am agreeable to the above contentions of the Ld AR of the assessee company. Firstly, the contemplated action for revision of quantum of depreciation allowed in respect of A.Y. 2006-07 in a proceeding initiated u/s 263 of IT Act for A.Y. 2007-08 is not permissible strictly in accordance with law. Even on merits. I am unable to reject the contention of the AR of the assessee company that the depreciation @ 60% is admissible on computer software because such rate has been provided in Appendix 1 and as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closure of any material fact by the appellant. The appellant had set off prior period income/reversal of excess expenditure against the prior period expenditure and these facts were disclosed before the AO at the time of original assessment proceedings. The AO made a disallowance of only net debit and the same addition was confirmed by the CIT(A). As per page 265 of the paper book filed by the appellant, there was an audit objection on this issue which led to in an action u/s 148 of the I.T. Act. The page 265 of the paper book is reproduced herein under for reference:- Name of Assessee M/s GAIL Address 16, Bhikaji Cama Place, RK Puram, New Delhi PAN/GIR No. AAACG1209J Status Company Circle Circle 12(1) Under section 143(3) Assessment Year 2006-07 Assessment Officer charge DCIT Circle 12(1) Return Income & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Interest u/s 234B for 33 months 1314449 Total tax effect 5297627 The audit observation was communicated to the Department vide audit memo no. 75 dated 01.09.2009. Reply awaited. 4.6 From a perusal of the above, the appellant s contention gets further strengthened that there was no failure on its part to disclose fully and truly all the material facts as the audit raised is on the basis of facts available on record. In view of the same, the invocation of section 148 in respect of this issue also cannot be justified. 4.7 The last issue pertain to late payment of employee s contribution to Provident/Pension Fund. The facts related to this addition were also disclosed before the AO at the time of original assessment proceedings. The said issue, even otherwise, is covered in favour of appellant by the decision of the jurisdictional High Court in the case of M/s AIMIL Ltd, reported in 321 ITR 508 on merits. Without prejudice to the same, there was no non-disclosure of any material facts on this issue as well at the time of original assessment proceedings. Even otherwise, reope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42. Sheo Nath Singh. 82 ITR 148 (SC) 43. Ganga Saran Sons (P) Ltd, 130 ITR 1. 11 (SC) 44. Birla VXL, 217 ITR 1 (Gujrat) 45. Multiscreen Media (P) Ltd. 324 ITR 54 (Bombay) 46. Garden Finance Limited, 268 ITR 48(Guj) 47. Kamlesh Sharma, 287 ITR 337 (Del) 48. Allana Cold Storage Ltd.. Vs. ITO 287 ITR 1 (Bom) 49. Asian Paints Limited, 296 ITR 90 (Bom) 50. Keshav Shares and Stocks Ltd, 326 ITR 553(Del) 51. Vishwanath Engineers, 354 ITR211(Guj) 52. Aroni Commercials Ltd, 362 ITR 403 (Bom) 53. Torrent Power SEC Ltd, 45 Taxman.com 443(Guj) 54. Lakhmani Mewal Das. 103 ITR 437.448(SC) 55. Arjun Singh, 246 ITR 363, 405(MP) 56. Seth Brothers. 251 ITR 270 (Guj) 57. Bombay Pharma Products, 237 ITR 614 (MP) 58. Lokendra Singh Rathore, 155 ITR 629 (MP) 59. United Electrical Co. (P) Limited, 258 ITR 317 (Del) 60. Foramer France 364 ITR 566 (SC) 61. Purolator India Ltd. 343 ITR 155 (Del) 62. Motor General Fiance, 184 Taxman 465 (Del) 63. Titanor Components Ltd. 343 ITR 183 (Bom) 64. D.T. T.D.C. Ltd, 3\232 CTR 260 (Del) 65. Haryana Acrylic Manufacturing Company, 308 ITR 38 (Del) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 147 do not apply but reopening could have been done only within four years. He submitted that this was the ground of appeal before the ld CIT (A). The ld CIT (A) held that there is no non-disclosure of facts in the original return and therefore, the extended time limit of this order do not apply to the facts of the case. He submitted that the ld CIT (A) has decided the ground before him only. He also supported the order of the ld CIT (A). 9. We have carefully considered the rival contentions. The reasons recorded by the ld AO for reopening of the assessment dated 25.03.2013 are reproduced by the ld CIT (A) in para No. 4.1 of his order. The first proviso to s 147 provides that no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year in cases where the original assessment was under s 143(3), unless the escapement is by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. The Department, in cases under the proviso, must prove that the assessee failed to disclose fully and truly all material facts required for assessment of its income. Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the employee s contribution fund the ld AO refers to the information already available with the return of income. The disallowance u/s 14A was merely to correct the incorrect computation in the original assessment proceedings. With respect to the deprecation on computer software, the ld AO has changed his opinion with respect to the rate of depreciation. He merely applies 25% rate of depreciation instead of 60% as applied in original assessment proceedings. In view of this, from all the above facts it is apparent that the ld AO has not pointed out that what facts were not disclosed by the assessee. The ld AO also not brought on record any specific information, which the assessee has failed to disclose in the original return. In view of this, we do not find any infirmity in the order of the ld CIT (A) in stating that reopening is barred by limitation and the period of six years for reopening is not available to the assessee. The ld CIT (A) is also correct in deciding that in absence of any failure on part of the assessee, extended limitation period of six years cannot be available to the ld AO; therefore, the reassessment order is passed beyond limitation. Thus, we do not find any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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