9911796707
TMI Blog2024 (7) TMI 1434X X X X Extracts X X X X X X X X Extracts X X X X ..... eral firms and drawing income from those firms. He is also the Managing Director of a limited Company named 'Greenland Particle Boards Pvt. Ltd.', which is involved in the business of manufacture of products of wood, cork, straw and plaiting materials. The petitioner filed returns of his income for the assessment years 2013-14 and 2014-15 on 28.1.2014 and on 31.3.2015 returning income of Rs.60,20,910/- and Rs.42,35,870/-, respectively. The assessments in respect of both the assessment years got completed under Section 143(3) of the Income Tax Act, 1961 ('Act', for short) on 23.3.2016 and 30.6.2016, respectively. 3. Subsequently, with respect to the assessment year 2014-15, the case was re-opened under Section 147 and assessment was completed on 18.6.2019 assessing the income at Rs.50,74,280/-. 4. In respect of both the assessment years, i.e. 2013-14 and 2014-15, notices under Section 148 of the Act were issued on 31.3.2021 (Exts.P2 and P4, respectively) stating that the assessing officer had reasons to believe that the petitioner's income chargeable to tax for these assessment years had escaped assessment within the meaning of Section 147 of the Act. The petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of both the assessment years, Exts.P7 and P10, respectively. It was stated that four years had expired and, therefore, necessary sanction from the Principal Commissioner of Income Tax had been obtained for re-opening the assessments, under Section 151 of the Act. It was also said that Section 14A had been incorporated to the Act to ensure that expenditure incurred in generating such tax exempted income is not allowed as a deduction while calculating total income of the concerned assessee. The petitioner's objections were over-ruled and the petitioner was given further opportunity to submit written submissions through the e-filing portal. The petitioner had submitted detailed submissions and, thereafter, fresh assessment orders in Exts.P9 and P12 had been passed on 22.3.2022 in respect of the assessment years 2013-14 and 2014-15, respectively. 7. Learned counsel for the petitioner submits that in the original assessment orders, the question of allowing the interest paid by the petitioner to Banks as business expenditure and non-applicability of Section 14A of the Act were considered and the petitioner claimed for deduction and that was allowed for both the assessment years. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... she submits that if the assessing officer comes in possession of any document and material, which was not considered while finalising the assessment orders, that would itself be sufficient for re-opening the assessments earlier completed. In this case, the Circular was not considered by the earlier assessing officer at the time of completing the assessment orders and, therefore, the decision to re-open the assessments had been taken, which is not liable to be interfered with. She further submits that once the assessment orders have been passed, the remedy of the petitioner is to challenge those orders before the appellate authority and not before this Court to interfere with the assessment orders. 11. Smt.Varghese further submits that Section 14A of the Act has been amended by Finance Act, 2022 and this amendment is only clarificatory in nature and, therefore, it would be treated that the amended provision has been in existence since incorporation of Section 14A. She, therefore, submits that there is no error in re-opening the assessment orders and therefore, the present writ petitions are liable to be dismissed. 12. The questions which arise for consideration in these writ petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circular No.5/2014 clarified the position that in certain cases, where no income has been earned by an assessee which has been claimed as exempt during the financial year, under Section 14A the said expenditure would be disallowed even when the tax payer in a particular year had not earned any income. Section 14A was inserted by Finance Act, 2001 with retrospective effect from 1.4.1962 and which got amended in 2007 and thereafter in 2022 by inserting a non-obstante clause, which is clarificatory in nature. Sub- Sections (2) and (3) thereto were inserted by Finance Act, 2006 with effect from 1.4.2007 to the effect that the assessing officer shall determine the amount of expenditure incurred in relation to such income, which does not form part of total income under the Act in accordance with such method as may be prescribed, if the assessing officer, having regard to the accounts of the assessee, is not satisfied with the correctness of the claim of the assessee in respect of such expenditure in relation to income which does not form part of the total income under the Act; and where an assessee claims that no expenditure has been incurred by him in relation to income which does not f ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
