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TMI Blog2025 (3) TMI 1440X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions with the Assessing Officer. On 29 December 2018, an order under Section 143 (3) of the Act was passed assessing income at Rs. 6307 crore under the normal provisions of the Act and Rs. 103.69 Crore under Section 115JB of the Act. 3. The aforesaid order was challenged before the Commissioner of Income-tax (Appeals) [hereinafter referred to as CIT (A)]. On 2 April 2019, the CIT (A) disposed of an appeal by a detailed order and partly allowed the same in favour of the Petitioner. Since the Petitioner and Respondent were aggrieved by the order passed by the First Appellate Authority, cross appeals were filed in the year 2019 before the Income-tax Appellate Tribunal and these appeals were disposed of by a common order of the Tribunal dated 28 September 2023. 4. Meanwhile, the Petitioner was served with the impugned notice under Section 148 of the Act on 27 March 2021 calling upon the Petitioner to file its return of income since the Respondents had reasons to believe that the income has escaped assessment. Vide letter dated 17 November 2021, the reasons were furnished to the Petitioner. Briefly, the reasons pertain to calculation of book profit under the Minimum Alternativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustries Ltd. (2018) 99 taxmann.com 206 (SC). 8. Mr. Sharma, learned counsel for the Respondents vehemently defended the impugned proceedings. He submitted that since reopening is initiated within the period of 4 years, the Assessing Officer is justified in issuing the impugned notice. He relied upon the decision of this Court in the case of Export Credit Guarantee Corporation of India Ltd Vs. Addl. CIT (2013) 350 ITR 651 (Bom) and decision of Delhi High Court in the case of Consolidated Photo and Finvest Ltd. vs Asst. Commissioner Of Income Tax (2006) 281 ITR 394 (Delhi). He, therefore submitted that the petition be dismissed. 9. We have heard learned counsel for the Petitioner and learned counsel for the Respondent and with their assistance have perused the documents which were brought to our attention. 10. Admittedly there is no dispute that the reopening notice is issued within the period of four years from the end of relevant assessment year. The reasons as recorded and furnished to the Petitioner reads as under; The assessee had filed e-return on 30.09.2016 declaring total income at nil under normal provision and Book Profit of Rs. 3401,27,67,375/- U/s 115JB. The case wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails of Financial Assets sold to Securitization/ Reconstruction Company for Asset Reconstruction (i.e Schedule 18, Page 203/204 of Financial Assessment), that during the year the bank has sold non-performing assets and there was a shortfall of Rs.322.02 crore in respect of 3 accounts sold to ARCs of which Rs. 161.01 crore have been written off during the year and balance amount Rs.161.01 crore would be written off in Financial year 2017. It is pertinent to mention here that the banks were allowed provision for NPA as deduction under section 36(1) (viia) of the IT Act, while computing the taxable income in each assessment year. Hence the Shortfall/loss on sale of these assets allowed in the computation resulted in double deduction against the same NPA. Hence the loss claimed by the assessee of Rs. 161.01 crore required to be added back while computing the taxable income. However, it was noticed that this issue was neither discussed in the assessment order nor considered for disallowance while computation. The This resulted in short computation of Business Income to the extent of Rs.161.01 crore. 2.3 Therefore I am of the view that income to the extent of amount of Rs. 161,01, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an appeal proceedings before CIT (A), on remand, the Assessing Officer has admitted that this provision of Rs.98 Lakhs ought not to have been disallowed and accordingly CIT (A) based on this admission of the Assessing Officer in the remand report has given relief to the Petitioner and deleted the addition. This order of the CIT (A) dated 2 April 2019 was available to the Assessing Officer while recording reasons for reopening the case on 27 March 2021. Therefore, on the date of recording the reasons which were based on the findings in the assessment order which findings were reversed by the CIT (A) and on the basis of admission in the remand proceedings by the Assessing Officer there could not have been any reasons to believe that any income has escaped assessment. The base of reopening falls to ground, therefore on this account, the reopening on the issue of provision for wage revision to be added while computing the book profit is required to be quashed and set aside. 17. With respect to the second issue on adding interest on non-performing investment to the extent of Rs. 867.32 crore is concerned while calculating book profit, the officer in the reasons recorded proceeds on fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of India Ltd (Supra) and Consolidated Photo and Finvest Ltd. (Supra), there was no query raised by the Assessing Officer during the course of the original assessment proceedings and therefore the courts took the view that the reopening within four years is valid if the Assessing Officer had overlooked the same. In the instant case, before us the Assessing Officer has examined all the three issues which are subject matter of the impugned proceedings at the time of the original assessment proceedings and same were also subject matter of appeal. Furthermore, the reasons recorded in the present case as observed us above is without looking at the records of the Petitioner and without any application of mind. Therefore, both these decisions cannot come to the rescue of the Respondents and are distinguishable on facts. 20. Mr. Mody, learned counsel for the Petitioner is justified in relying upon the decision which we have quoted above, which have taken consistent view that even if the reassessment proceedings are initiated within a period of four years, if the issues were examined in the course of the assessment proceedings then reassessment proceedings are bad in law. 21. We may al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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