2022 (3) TMI 480 - HC - Income Tax

Reopening of assessment u/s 147 - amount received under Agricultural Debt Relief and Debt Waiver Scheme is taxable or not? - ITAT opined that the AO has correctly recorded the reasons and reopened the assessment and completed the assessment u/s. 147 of the Act thus, the reopening is valid and for amout received under scheme direct the AO to re-examine the issue afresh in accordance with law - HELD THAT - Though the appellant challenged the aforesaid order of the Tribunal in respect of both the issues, by raising various grounds and also placing reliance on case laws, we are of the view that the Income-tax Act is a self-contained Act and this court under section 260A of the Act in its appellate jurisdiction, is not the proper forum for deciding such mixed questions. Therefore, we remand the matter to the Assessing Officer as done by the Tribunal, however, with a direction to consider all the issues raised by the appellant, without being influenced by any of the observations made by the Tribunal, and pass orders afresh, after providing reasonable opportunity to the appellant. Such an exercise shall be completed within a period of three months from the date of receipt of a copy of this judgment.

Summary

Issues:
1. Validity of reopening the assessment.
2. Taxability of the amount received under Agricultural Debt Relief and Debt Waiver Scheme.

Issue 1: Validity of reopening the assessment:
The appellant, a Nationalised Bank, challenged the reassessment order passed under section 147 of the Income-tax Act, 1961 for the assessment year 2011-12. The appellant contended that there was no escapement of income as the amount reimbursed by the Government pertained to interest, already credited to the Profit & Loss account and offered to tax. The appellant argued that the principal amount received was a loan repayment by the Government, not income of the bank. The Tribunal upheld the reopening of assessment, citing the appellant's claim of bad debt and subsequent receipt under the Scheme as an escapement of income. The Tribunal directed the Assessing Officer to re-examine the issue afresh. The appellant relied on case laws to support its contention. The High Court remanded the matter to the Assessing Officer to consider all issues raised by the appellant without being influenced by the Tribunal's observations, to be completed within three months.

Issue 2: Taxability of the amount received under Agricultural Debt Relief and Debt Waiver Scheme:
The Tribunal found that the amount claimed as a bad debt by the appellant was received under the Agricultural Debt Waiver and Debt Relief Scheme, 2008, leading to an escapement of income. The Tribunal directed the Assessing Officer to re-examine the issue in accordance with the law. The High Court, noting the self-contained nature of the Income-tax Act, remanded the matter to the Assessing Officer for a fresh assessment, instructing consideration of all issues raised by the appellant without being influenced by the Tribunal's observations. The High Court disposed of the tax case appeal without costs.

This detailed analysis of the judgment outlines the issues involved, the arguments presented by the appellant and respondent, the Tribunal's findings, and the High Court's decision to remand the matter to the Assessing Officer for a fresh assessment.