9911796707
TMI Blog2010 (6) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent to consider the applicability of Section 14A. No order was passed by the Assessing Officer to give effect to the order passed by the revisional authority. - However, on 26 February 2009 a notice was issued to the Petitioner seeking to reopen the assessment for Assessment Year 2002-03 on the ground that there was reason to believe that income chargeable to tax had escaped assessment within the meaning of Section 147. Held that: . Where an assessment has been made under sub section (3) of Section 143 for the relevant Assessment Year, no action can be taken after the expiry of four years from the end of the relevant Assessment Year unless inter alia there has been a failure of the assessee to disclose fully and truly all material f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut considering the disallowance under Section 14A. In its reply dated 17 January 2005 the assessee disclosed that during the previous year relevant to Assessment Year 2002-03 it had received a dividend income of Rs. 206.95 Crores. The assessee stated that investments were made out of internal accruals and no borrowings were made for the purpose of investment. Accordingly to the assessee no expenditure had been incurred for earning the dividend income from these investments and no administrative expenditure was involved. The assessee noted that in the course of the assessment made under Section 143(3) for Assessment Year 2001-02 the Assessing Officer had accepted the fact that no expenditure had been incurred for earning tax free dividend in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the expenses incurred and position of law, the appropriate disallowance @ 2% of the total administrative cost amounts to Rs.3,170.95 lakhs. 2. By not allocating any expenditure towards earning of dividend income and by claiming that whole of the expenditure incurred during the year was incurred for earning of the taxable income offered in the return filed, the assessee company has failed to disclose fully and truly all material facts necessary for its assessment for the year under consideration." 4. The reopening of the assessment in the present case is beyond a period of four years of the expiry of the relevant Assessment Year. The validity of the invocation of the jurisdiction under Section 147 will therefore depend upon whether wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of law that each Assessment Year constitutes an independent source of assessment and that consequently, the Assessing Officer was not bound by the view which was taken during Assessment Years 2000-01 and 2001-02. 7. From the record before the Court it is evident that during the course of the assessment proceedings for Assessment Year 2002-03 the assessee had while computing its taxable income and tax liability disclosed a dividend income of Rs.206.95 Crores under the head of income from other sources. This was also disclosed in Schedule N to the balance sheet of the assessee as of 31 March 2002. The Assessing Officer by his letter dated 11 October 2004 specifically sought a disclosure of the details of dividend claimed to be exempt unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment made under Section 143(3) for the assessment year 2001-2002 where the assessing officer had accepted the fact that no expenditure was incurred for earning tax free dividend income." 8. The record therefore clearly shows that the assessee disclosed fully and truly all the material facts necessary for the assessment insofar as it had a bearing on the issue in question. The Assessing Officer specifically applied his mind to the question as to whether the entire dividend income could be claimed as exempt without a disallowance for expenditure. As a matter of fact, even during the course of Assessment Year 2000-01 the Assessing Officer has applied his mind to the same issue while passing the order of assessment under Section 143(3) on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 263 the assessee had filed an appeal before the Tribunal. The assessee sought liberty before the Tribunal to withdraw the appeal with permission to revive the appeal in the event that the Assessing Officer passed an order in compliance with the directions of the Commissioner under Section 263. Since the Assessing Officer had not passed an order giving effect to the order of the Commissioner within the period of limitation under Section 153(2)(A), the appeal was stated to have become academic and was consequently allowed to be withdrawn on 18 May 2009. It was in the meantime on 26 February 2009 that the Assessing Officer sought to invoke the jurisdiction under Section 147 by issuing a notice under Section 148. Under the second proviso to S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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