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2013 (12) TMI 187 - AT - Income TaxWhether reopening of assessment proceedings u/s 148 valid or not The assessee has claimed refund on excess depreciation wrongly calculated on valuation of securities by the assessee After completing assessment u/s 143(3) the AO reopened the assessment u/s 147 - The original assessment for the assessment year 2001-02 was completed under section 143(3) on February 13 2004 determining the total income at Rs. 26, 35, 49, 42, 360 - A search and seizure action was initiated in the assessee s case by the Department on July 2 2005 on which date the assessment for the assessment year 2001-02 was not pending - Held that - Following All Cargo Global Logistics Ltd. 2012 (7) TMI 222 - ITAT MUMBAI(SB) - In view of the non obstante clause of sub-section (1) of section 153A the Assessing Officer has no jurisdiction to issue notice under section 148 of the Act in respect of those six assessment years which falls within the exclusive jurisdiction of section 153A - The Assessing Officer was not justified in issuing notice under section 148 on August 28 2006 and in completing the impugned assessment under section 143(3) read with section 147 of the Act on October 31 2006 - The Assessing Officer instead of complying with the requirement of section 153A proceeded with the provisions of section 147/148 which are not applicable in the assessment under section 153A Decided in favour of assessee.
Issues Involved:
1. Reopening of assessment under section 147 of the Income-tax Act, 1961. 2. Validity of reassessment proceedings under section 153A of the Income-tax Act, 1961. 3. Addition of excess depreciation. 4. Multiple assessment orders for the same assessment year. Issue-wise Detailed Analysis: 1. Reopening of Assessment under Section 147: The assessee challenged the reopening of the assessment under section 147 of the Income-tax Act, 1961. The Assessing Officer issued a notice under section 148 on August 28, 2006, for the assessment year 2001-02, and on July 25, 2006, for the assessment year 2002-03, to rectify the excess depreciation claimed by the assessee. The assessee objected to the reopening, arguing that the original assessments were already completed and there was no new material to justify the reopening. The Tribunal found that the Assessing Officer had no jurisdiction to issue notice under section 148 after the date of search, i.e., July 2, 2005, as the assessments for the relevant years fell within the exclusive jurisdiction of section 153A. 2. Validity of Reassessment Proceedings under Section 153A: The Tribunal admitted the additional ground raised by the assessee challenging the validity of the reassessment proceedings under section 153A. It was argued that after the search conducted on July 2, 2005, the Assessing Officer should have issued notice under section 153A for the six preceding assessment years, and not under section 148. The Tribunal, citing the Supreme Court's decision in National Thermal Power Co. Ltd. v. CIT and the Special Bench decision in All Cargo Global Logistics Ltd., held that the Assessing Officer was obliged to issue notice under section 153A and complete the assessments under this section. The issuance of notice under section 148 and completion of assessments under section 143(3) read with section 147 were deemed illegal and without jurisdiction. 3. Addition of Excess Depreciation: The Assessing Officer added an excess depreciation amount of Rs. 418.04 crores to the income of the assessee, citing non-conformity with the Central Board of Direct Taxes and the Reserve Bank of India guidelines. The Tribunal did not delve into the merits of the addition of excess depreciation, as it quashed the assessment orders on legal grounds. 4. Multiple Assessment Orders for the Same Assessment Year: The assessee contended that the Assessing Officer erred in making multiple assessment orders for the same assessment year. The Tribunal agreed, stating that after the search on July 2, 2005, the assessment had to be made under section 153A, which overrides sections 147 and 148. Consequently, the assessments completed under section 143(3) read with section 147 were quashed as they were not in accordance with the law. Conclusion: The Tribunal quashed the assessment orders for the assessment years 2001-02 and 2002-03, holding that the reassessment proceedings under section 147 were invalid due to the overriding provisions of section 153A. The Tribunal emphasized that after a search, the Assessing Officer must follow the procedure under section 153A for the preceding six years, making any assessments under section 148 invalid for those years. The appeals were allowed in favor of the assessee.
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