TMI Blog2021 (7) TMI 1042X X X X Extracts X X X X X X X X Extracts X X X X ..... ment years 2003-04 to 2009-10 the claim of the respondent stood accepted. Though the learned counsel for the appellant has submitted that each assessment year would give a separate cause of action and decision taken in one assessment year cannot act as a res judicata in the other years, the same would also have a vital bearing in the adjudication of the present appeal. In Commissioner of Income Tax v. Excel Industries Limited [ 2013 (10) TMI 324 - SUPREME COURT ] Revenue cannot be allowed to flip-flop on the issue and it ought let the matter rest rather than spend the tax payers' money in pursuing litigation for the sake of it. - ITA 153/2020 & CM APPL. 7854/2020 - - - Dated:- 19-7-2021 - HON'BLE MR. JUSTICE MANMOHAN AND HON'BLE MR. JUSTICE NAVIN CHAWLA Appellant Through: Mr. Kunal Sharma, Sr. SC with Ms. Zehra Khan, Jr. SC and Mr. Shubhendu Bhattacharyya, Adv Respondent Through: Mr. Gautam Jain, Adv. NAVIN CHAWLA, J. (Oral) 1. This appeal has been heard by way of video conferencing. 2. This appeal has been filed challenging the order dated 31.07.2019 passed by the learned Income Tax Appellate Tribunal (hereinafter referred to as the ITAT ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove order before the learned ITAT, which was pleased to dismiss the appeal vide its Impugned Order dated 31.07.2019 observing that as the notice under Section 148 of the Act was issued more than four years from the end of the Assessment Year and it remained undisputed that the Assessee did file return under Section 139 of the Act; an Assessment Order under Section 143 (3) of the Act was passed on 19.12.2011; reassessment proceedings under Section 147 had been initiated only on 22.03.2011; and the Revenue had failed to show which material facts were not disclosed by the Assessee, no action under Section 147 of the Act could be taken by the appellant. 6. The learned counsel for the appellant submits that in terms of the third proviso to Section 147 of the Act a four-year period provided in the first proviso to the said section would commence only on the final adjudication of the appeal filed by the respondent, which in the facts of the present case was disposed of by the Commissioner of Income Tax (Appeals) [hereinafter referred to as CIT (Appeals) ] vide order dated 30.01.2009. He submits that therefore, the notice under Section 148 of the Act issued on 22.03.2011 was within th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d franchise fee of ₹ 2,40,00,000/-. The franchise fee being of capital nature was not allowable and should have been disallowed and added back to the income of the assessee after allowing depreciation at the rate of 25% amounting to ₹ 60,00,000/- and balance amount of ₹ 1,80,00,000/- should have been added back to the income of the assessee From the reason so recorded, the AO has not alleged any failure on the part of the assessee to disclose truly and fully all material facts which is a precondition for taking action u/s 148 where action is taken after expiry of 4 years. The assessee has disclosed full details in return of income accompanied by audited accounts and copy of agreement submitted during the course of assessment proceedings u/s 143(3). From the fact stated by the assessee as well as those recorded in the assessment order it appears that at the time of scrutiny assessment proceedings, the assessee had fully and truly disclosed all material facts and thereafter scrutinizing the details furnished by the appellant, the AO made the regular assessment u/s 143(3)and had formed an opinion that the appellant has correctly claimed these expenses as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecedents brought to our attention, at the time of hearing or referred to in the materials on record. We find that notice U/s 148 of I.T. Act was issued, thereby reopening the assessment, on 22.03.2011 which is more than 4 years after 31.03.2005 (i.e. more than 4 years from end of the Assessment Year 200405 with which we are concerned in this appeal). Therefore, the case of the assessee is covered by proviso to section 147 of I.T. Act. For ease of reference, the provisions of section 147 of I.T. Act are reproduced as under: xxxxxxx (4.1) On perusal of proviso to section 147 of the Act, it is clearly prescribed that no action shall be taken u/s 147 of the Act after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment by reason of the failure on the part of the assessee to make a return u/s 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. In the case before us, the undisputed facts are, that the assessee did file return u/s 139 of the Act; the AO did pass asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue has failed to discharge this onus. When it is not the case of the Revenue that there was failure on the part of the assessee to disclose all material facts fully and truly, Revenue cannot violate the statutory protection enjoyed by the assessee under proviso to section 147 of the Act. In the facts and circumstances of this case, we hold that the statutory protection enjoyed by the assessee under proviso to section 147 of the Act was wrongly violated by Revenue. Therefore, we dismiss all the grounds of appeal in this appeal filed by the Revenue, and hold that the assumption of jurisdiction u/s 147 of the Act and initiation of proceedings u/s 147 r.w.s. 148 of the Act was erroneous in law in the facts and circumstances of this case. In view of this conclusion, there is no need for us to adjudicate whether the initiation of proceedings u/s 147 of the Act and the additions made in order dated 19.12.2011 u/s 143(3)/147 of the Act amounted to change of opinion as this issue becomes purely academic. Accordingly, we decline to interfere with the order of Ld.CIT(A) whereby she quashed the assessment order u/s 143(3)/147 of the Act dated 19.12.2011. For Coming to this conclusion, we ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch assessment year would give a separate cause of action and decision taken in one assessment year cannot act as a res judicata in the other years, the same would also have a vital bearing in the adjudication of the present appeal. In Commissioner of Income Tax v. Excel Industries Limited, (2014) 13 SCC 459, the Supreme Court while considering similar submissions has held as under: - 24. Secondly, as noted by the Tribunal, a consistent view has been taken in favour of the assessee on the questions raised, starting with Assessment Year 1992-93, that the benefits under the advance licences or under the duty entitlement pass book do not represent the real income of the assessee. Consequently, there is no reason for us to take a different view unless there are very convincing reasons, none of which have been pointed out by the learned counsel for the Revenue. 25. In Radhasoami Satsang v. CIT, (1992) 1 SCC 659: (1992) 193 ITR 321 this Court did not think it appropriate to allow the reconsideration of an issue for a subsequent assessment year if the same fundamental aspect permeates in different assessment years. In arriving at this conclusion, this Court referred to an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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