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TMI Blog2012 (11) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... mendment to Explanation-1 to section 115JB - no fresh material available with the Assessing Officer on the basis of which he could have justifiable formed reasons to believe that any income chargeable to tax had escaped assessment in the instant case - initiation of reassessment proceedings in the instant case was bad in law and consequently the impugned order is liable to be cancelled - appeal of assessee is allowed - IT Appeal No. 276 (Mad.) of 2012 - - - Dated:- 18-5-2012 - N.S. Saini, V. Durga Rao, JJ. R. Vijayaraghavan and S.P. Chidambaram for the Appellant. Mahendar Singh for the Respondent. ORDER N.S. Saini, Accountant Member This is an appeal filed by the Assessee against the order of the Commissioner of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. b. The Commissioner of Income Tax(A) failed to appreciated that the clause (i) to Explanation (1) to Section 115JB of the Act has been inserted vide Finance Act, 2009 and the said provision did not exist while filing the return of income. 4.a. The Commissioner of Income Tax(A) erred in confirming the levy of interest under section 234B of the Act. b. The Commissioner of Income Tax(A) failed to appreciated that the Appellant could not have assumed that a legislative amendment was going to be made in the year 2009 with retrospective effect from the year 2001 and paid the advance tax. 5. The Appellant craves leave to alter, amend or modify any of the foregoing grounds of appeal or add any additional grounds of appeal on or befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment by stating as under:- "2. As requested by you, the reasons for reopening the assessment under Section.147 and issuing notice under Section.148 for the Assessment Year 2003-04 are communicated as under: Reasons: The assessee made provision of Rs. 1,49,46,022/-towards bad and doubtful debts. While computing book profit under Section.115JB, the above amount should have been added to the net profit as per P L account and the same was not done by the assessee. Further, it was not considered in the order under Section.143(3) passed on 10.03.2006. Therefore, I have reason to believe that income to the extent of Rs. 1,49,46,022/- escaped assessment. In view of the above, the assessment for the Assessment Year 2003-03 is reopened ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of CIT v. Max India Ltd. [2007] 295 ITR 282/[2008] 166 Taxman 188. The Authorised Representative of the assessee relied on the decision of Hon'ble Bombay High Court in the case of Rallis India Ltd. v. Asstt. CIT [2010] 323 ITR 54/190 Taxman 1 where on the similar facts and circumstances of the case, the Hon'ble Bombay High Court held that on the date on which the Assessing Officer purported to exercise his power to reopen the assessment under Section 147, the legislative amendment by the insertion of clause (i) to Explanation (1) to Section 115JB had not been brought into force on the statute book. Therefore, it seems, the amendment could not have been and has not the ground, which has been taken by the Assessing Officer while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, brought that the order of the Commissioner of Income Tax(A) should beset aside and the reassessment order should be cancelled as being bad in law. 5. On the other hand, the Departmental Representative supported the orders of the lower authorities. 6. After considering the rival submissions and perusing the materials available on record, we find that in the instant case, the assessee was assessed to tax on book profit of Rs. 11,19,72,308/- in an assessment made under Section 143(3) read with section 92C(4) on 31.03.06. The assessee contended that the Assessing Officer after examining the issue of provision for bad and doubtful debts of Rs. 1,49,46,022/- debited in the profit and loss account of the assessee by issue of no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the income had escaped assessment on the ground that the provisions for bad and doubtful debts were not added back in computing the book profit under Section 115JB of the Act. The Departmental Representative could not controvert the above submissions of the Authorised Representative of the assessee. Therefore, in our considered opinion as on 31.03.2008 there was no fresh material available with the Assessing Officer on the basis of which he could have justifiable formed reasons to believe that any income chargeable to tax had escaped assessment in the instant case. Therefore, initiation of reassessment proceedings in the instant case was bad in law and consequently the impugned order is liable to be cancelled. We order accordingly. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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