2020 (2) TMI 1682 - HC - Income Tax

Reopening of assessment u/s 147 - whether the learned Tribunal was legally justified in upholding the action of the Assessing Officer reassessing the interest income of the appellant under sections 147 / 148? - HELD THAT - This question has to be answered in the affirmative notwithstanding the fact that the AO, admittedly, on account of oversight / mistake failed to assess the interest income since there was no question of double addition which had arisen in this case. A judgment of the Hon'ble Supreme Court which was referred to and relied upon by the learned advocate representing the appellant rendered in Commissioner of Income-Tax v. Corporation Bank Ltd. 1999 (2) TMI 16 - SUPREME COURT has no manner of application at all in the facts of the instant case, since that judgment was rendered prior to the applicable law having undergone several amendments.

Summary

Issues:
1. Whether the ITAT was legally justified in upholding the action of Assessing Officer reassessing the "interest income" of the appellant u/s 147 / 148 of the Act?
2. Whether reassessment is permissible u/s 147 / 148 of the Act based on audit objection raised by the revenue audit party?

Analysis:
The judgment pertains to an appeal under section 260-A of the Income Tax Act, 1961, concerning a judgment and order passed by the Income Tax Appellate Tribunal, Agra Bench, Agra. The appellant raised two substantial questions of law regarding the reassessment of interest income under sections 147/148 of the Act. The Assessing Officer, in this case, failed to assess the interest income due to an oversight/mistake, which was disclosed in the books of accounts of the appellant. However, the court found no question of double addition arising in this case, justifying the reassessment of interest income.

The relevant provision of law in this case is section 147 of the Income Tax Act, which deals with income escaping assessment. The Assessing Officer observed that the appellant had shown interest income in the audited balance sheet, leading to the addition of the same to the appellant's income. The court affirmed the Assessing Officer's decision to reassess the interest income despite the initial oversight.

The court referred to a judgment of the Supreme Court in Commissioner of Income-Tax v. Corporation Bank Ltd., which was rendered prior to the amendments in the law. The court held that this judgment had no application in the present case. The questions of law framed by the appellant were answered in the affirmative, and the appeal was disposed of by affirming the Tribunal's judgment and order.

In conclusion, the court upheld the reassessment of interest income by the Assessing Officer under sections 147/148 of the Income Tax Act, finding no grounds for double addition and dismissing the appellant's contentions based on a previous Supreme Court judgment.