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TMI Blog2013 (5) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... the accounts for the earlier year, surely during the course of assessment, he could have called for such details. Having chosen not to do so, his attempt to reopen the just assessment after a period of four years from the end of relevant assessment year, must fail. Thus AO belief that the income chargeable had escaped assessment lacks validity. In favour of assessee. - Special Civil Application No. 340 of 2013 - - - Dated:- 22-4-2013 - Akil Kureshi And Sonia Gokani, JJ For the Appellant : Mr S N Soparkar, Ld. Sr. Counsel with Mr B S Soparkar, Adv For the Respondent : Mr K M Parikh, Adv JUDGEMENT:- Per : Akil Kureshi, J : 1. Heard learned counsel for the parties for final disposal of the petition. 2. The petitioner-National Dairy Development Board (hereinafter referred to as 'the NDDB') has, in the present petition, challenged the notice dated March 15, 2012 issued by the Assistant Commissioner of Income Tax under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). Through such notice, he proposes to reopen an assessment of the petitioner for the assessment year 2005-06, which was originally framed after scrutiny. 3. Brief facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ific requirements of the amount which can be estimated closely and specific commitments, non-contingencies and diminution in the value of asset existing as on the date of balance sheet where the amount involved cannot be determined with substantial accuracy. Therefore, the provision is created for some specific object and it reduces the net profit or increases the net loss. In other words, any provision made in the earlier years was charged to the profit and loss account and it has reduced the net profit or increased the net loss. The provision made in those years is not appropriation of profit. Therefore, the write back of the provision in the subsequent years is the reversal of the provision made in the earlier years which were allowed as it was charged to profit and loss account. Since the creation of the provision is a charge on profit and loss account, there is no doubts that write back of the provision of Rs.52,22,57,307/- is an income of the assessee of the A.Y. under consideration in which the provision is reversed. The write back of any provision is deductible provided the same is added back while computing taxable income of the year in which it was created which was not d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) That there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. The reopening beyond the period of four years from the end of relevant assessment year was not permissible. In this respect, he drew our attention to the return filed by the petitioner in which the provision written back of Rs.52,22 crores was reflected. Such provision was explained in the notes forming part of the income-tax return as under : 8. Provision written back of Rs.52,22,57,307 being write back of excess provision for doubtful debts as per RBI Prudential Norms and provision for contingencies made in the earlier year, which are not in the nature of income and not liable to tax u/s.41(1) of the Act and hence have been excluded while computing total income. (ii) Counsel contended that under identical circumstances, this Court in the case of the present petitioner had quashed such a notice of reopening for the earlier assessment year 2003-04 by judgment dated March 24, 2011 passed in Special Civil Application No.14449 of 2010. (iii) That in any case, the belief of the Assessing Officer that the income chargeable to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notes forming part of the income-tax return, in which it was clarified that such amount was being written back of excess provision for doubtful debts as per RBI Prudential Norms and provision for contingencies made in the earlier years, which are not in the nature of income and not liable to tax under Section 41(1) of the Act. (ii) For the previous year, we are not judging the validity of such an assertion. We only conclude that there was sufficient disclosure in the return filed by the petitioner to enable the Assessing Officer if he so desired to scrutinise such a claim. In that context, therefore, the contention of the learned counsel for the Revenue that the original assessment order did not examine this claim and further that the details pertaining to the provision made for the assessment years, during the period when the NDDB was not subject to income-tax scrutiny, must fail. Had this been a case of notice for reopening issued within a period of four years, nonexamination of claim in the original assessment would bear some relevance. When such a notice is issued beyond the period of four years, the crucial question would be whether the income chargeable to tax can be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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