TMI Blog2022 (4) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, issuance of notice u/s.147 of the Act, impugned reassessment order as well as first appellate order are hit by second limb of first proviso to section 147 of the Act, therefore, on this count entire action of the AO including impugned reassessment order and first appellate order deserves to be quashed. So far as second part of the arguments of the assessee, we are of the considered view that from the reasons recorded by the AO we clearly note that the AO has only perused the relevant records as well as Notes forming part of Accounts by initiating action against the assessee for reassessment proceedings for A.Y.2007-2008 and there was no new tangible material in the hands of the AO, which was not before him during original scrutiny assessment proceedings, therefore, it is a clear case of change of opinion, which is again hit by the recent decision in the case of Marico Ltd. [ 2020 (6) TMI 436 - SC ORDER] . The initiation of reassessment proceedings u/s.147 of the Act, notice u/s.148 of the Act, impugned reassessment and first appellate order also deserves to be quashed on this count and we hold so. - Decided in favour of assessee. - ITA No. 2319/Chny/2017 - - - Dated:- 31- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent u/s.143(3) of the Act was completed on 10.12.2009 accepting Nil income returned by the assessee. He further submitted that on perusal of the record, the AO noticed that the assessee has concluded that interest payment of ₹ 30,97,959/-, which was disallowed u/s.43B of the Act relevant to the assessment year under consideration i.e. A.Y.2007-2008, hence, any amount included for deduction from total income as interest income written back which was already disallowed u/s.43B, need not qualify for such deduction. Therefore, the assessee failed to add back the above amount which is liable to be disallowed u/s.43B of the Act and, thus, the amount of ₹ 30,97,959/- has escaped assessment. Ld. Sr. DR also drew our attention towards reasons recorded by the AO vide 25.03.2014 and submitted that under Schedule D of audit accounts of the assessee unsecured loan of ₹ 617,81,998/- was shown as interest free sales tax loan but as per para 6(a) of notes forming part of account, this amounts relates to a period of five years beginning from 01.04.1999 which was ended on 31.03.2014 and amount remained unpaid to Government. Ld. Sr. DR also submitted that as the assessee company has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the carry forward losses for earlier years relating to 2000-01 to 2006-07. The Assessee submitted revised statement of income wherein interest on term loan from SIB disallowed u/s.43B for the assessment years 2003-04 to 2007-08 and credited back to the extent of RS.4,81,14,000/- in assessment year 2007-08 was deducted and the net profit of ₹ 6,20,59,744/- was reduced to ₹ 1,71,06,622 and also withdrawing depreciation originally claimed to the extent of ₹ 34,60,878/-. The assessment u/s 143(3) was completed on 10.12.2009 accepting 'Nil' income returned by the Assessee. On perusal of records, it is found that the Assessee has included interest payment of ₹ 30, 97,959/- disallowed under 438 relating to current assessment year viz 2007-08 against withdrawal of interest in the revised returns which is not correct. As seen from the schedules attached to the Balance Sheet, under Schedule 'C - Secured Loans, an amount of ₹ 2,08,68,797/- has been shown as SIB funded interest. The conversion of outstanding interest as funded loan cannot be considered as discharge of liability u/s.43B. Hence, any amount included for deduction from total in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to disclose fully and truly all material facts necessary for his assessment, for that assessment year: 7. From careful reading of above noted proviso to section 147 of the Act, in our humble understanding, first limb of proviso states that no order of reassessment shall be made after expiry of four years from the end of the relevant assessment year which was sought to be reopened by the AO for the purpose of making reassessment. In the present case, the limit of four years ended on 31.03.2012, therefore, after this date, the AO was not entitled and empowered to initiate reassessment proceedings against the assessee, however, second limb of first proviso to section 147 of the Act again empowers the AO to initiate reassessment proceedings in a case where it is found that there was a failure on the part of the assessee to disclose fully and truly all relevant facts and material relevant to his assessment. For invoking second limb of first proviso to section 147(1) of the Act, the AO is duty bound to record an allegation against the assessee in the reasons recorded for initiation of reassessment proceedings that any income chargeable to tax has escaped assessment for such assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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