TMI Blog2021 (4) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 11 - SUPREME COURT ] we set aside and quash the notice dated 17/05/2016 seeking to reopen concluded assessment to be bad in law. - Decided in favour of assessee. - ITA No.551/Bang/2019 - - - Dated:- 30-3-2021 - Shri B. R. Baskaran, Accountant Member And Smt. Beena Pillai, Judicial Member For the Appellant : Shri. S. V. Ravishankar, Advocate For the Respondent : Shri. Priyadarshi Mishra, Addl. CIT(DR)(ITAT) ORDER PER BEENA PILLAI, JUDICIAL MEMBER: Present appeal has been filed by assessee against order dated 24/01/2019 passed by the Ld.CIT (A) Gulburg, for assessment year 2010-12 on following grounds of appeal: 1. The order of the Commissioner of Income Tax(Appeals) and the assessing officer is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case. 2. The appellant denies itself liable to be assessed for the disallowance of ₹ 50,00,000/- made by the respondent on the facts and circumstances of the case. Legal Grounds: 3. The notice issued under section 148 of the Act, is bad in law. 4. The notice issued u/s 148 is defective, which is not a curable defect and thus all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be interpreted liberally on the facts and circumstances of the case. 15. The authorities below have taken shelter under hyper-technicalities to disallow the deduction claimed by the assessee on the facts and circumstances of the case. 16. The authorities below failed to appreciate that the total deduction claimed by the assessee on account of provision does not exceed the upper limits prescribed under section 36(1)(viia) of the Act and accordingly has to be allowed in entirety.. 17. The appellant denies the liability to pay interest under section 234A, 234B and 234C of the Act in view of the fact that there is no liability to additional tax as determined by the learned assessing officer. Without prejudice the rate, period and on what quantum the interest has been levied are not in accordance with law and further are not discernable from the order and hence deserves to be cancelled on the facts and circumstances of the case 18. The appellant craves for leave of the Hon'ble Tribunal, to add, alter, delete, amend or substitute any or all of the above grounds of appeal as may be necessary at the time of hearing. 19. For these and other grounds tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecting the contentions. 7. Aggrieved by the order of Ld.AO, assessee preferred appeal before the Ld.CIT(A) assessee had raised the legal issue challenging the validity of reopening under section 147 of the act as it was after a period of 4 years from the end of the assessment year in which the original assessment order was passed. It was contested that there was no fresh evidence warranting invoking of the said provisions and therefore the reopening is bad in law. On merits assessee filed various submissions challenging the addition. However the Ld.CIT(A) rejected the legal ground raised by assessee by observing as under: 3.6 Here in the instant case, the assessee has not categorically stated as to what are the assets on which a provision is created to be doubtful or whether they are classified assets as prescribed by the RBI. Further, the provision created is towards Standard Assets which is unascertained and not incurred in the year under reference. The above amount is only a provision created and is not totally written off in the books of accounts after becoming totally really bad. Therefore, the Assessing Officer has, after making elaborate discussion and taking into set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the computation filed. And therefore the original assessment passed was based on misrepresentation of facts of the case. 13. He thus submitted that the reopening beyond period of 4 years without there being a satisfaction recorded by the Ld.AO of failure on behalf of assessee to truly and fully disclose all material facts, is bad in law. In support of his contention the Ld.AR placed reliance on following decisions: CIT vs Kelvinator India Ltd. reported in 320 ITR 561 (SC) CIT vs Usha international Ltd. reported in 348 ITR 480 (Delhi full bench) Dishman Pharmaceuticals Ltd. vs DCIT reported in 346 ITR 328 (Guj) 14. On the contrary the Ld.Sr.DR submitted that the reassessment notice the present case is valid and that the disallowances made by the Ld.AO could not have been allowed as deduction. He placed reliance on following decisions.: Phool Chand Bajrang Lal vs ITO reported in (1993) 69 Taxmann.com 627(SC) Honda Siel Power Products Ltd. vs DCIT reported in (2011) 197 taxman 415(Del.) Kalyanji Mavji Co. Vs CIT reported in (1976)102 ITR 287 15. We have perused submissions advanced by both sides in light of records placed before us. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vji Co. Vs CIT reported in (1976)102 ITR 287. We note that in the facts before Hon ble Supreme Court in this case reopening was initiated on the basis of information which came to the knowledge of assessing officer after original assessment by way of fresh facts revealed in the assessment for year 1958-59. The Ld.Sr.DR submitted that in the present facts of the case the reopening of the assessment is because of the disallowance made by the Ld.AO in the subsequent assessment year. He thus argued that the ratio by Hon ble Supreme Court Kalyanji Mavji Co. Vs CIT (supra) is applicable to the present facts of the case. 20. The ratio of Hon ble Supreme Court Kalyanji Mavji Co. Vs CIT (supra) is a good law to the cases prior to the amendment to section 147 of the Act. After the amendment, the law has been considered by Hon ble Supreme Court in case of CIT vs Kelvinator India Ltd. reported in (2010) 187 Taxmann 132 that reads as under: 3. To answer the above question, we need to note the changes undergone by section 147 of the Income-tax Act, 1961 [for short, the Act ]. Prior to Direct Tax Laws (Amendment) Act, 1987, section 147 reads as under: 147. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year). [Emphasis supplied] 4 On going through the changes, quoted above, made to section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987 , re- opening could be done under above two conditions and fulfilment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act [with effect from 1-4-1989], they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to re-open the assessment. Therefore, post 1-4-1989 , power to reopen is much wider. However, one needs to give a schematic interpretation to the words reason to believe failing which, we are afraid, section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of mere change of opinion , which cannot be per se reason to reopen. We must also keep in mind the conceptual difference b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the details of deduction claimed under section 36(1)(viia) of the act was available with the Ld.AO during the course of original assessment proceedings. 22. The Ld.AR drew our attention to page 54 of paper book which is reply to notice dated 13/11/2012 during the scrutiny assessment for year under consideration filed by assessee wherein para 6 shows the aggregate average advances for deduction claimed under section 36(1)(viia) of the Act, along with the computation enclosed which is page 56 showing the details of various types of provisions. We therefore reject the observation of the Ld.AO that assessee deliberately grouped the 2 provisions together, and there was misrepresentation of facts. 23. From the replies furnished by assessee during the original assessment proceedings placed in the paper book relied by the Ld.AR, against queries raised by the Ld.AO, we are satisfied that assessee had filed submissions in respect of the issues considered for reopening the assessment. 24. Further the reasons recorded reproduced hereinabove suggests that there was no failure on behalf of assessee to fully and truly disclose all material facts necessary for assessment, which is a neces ..... X X X X Extracts X X X X X X X X Extracts X X X X
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