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TMI Blog2014 (7) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year - The only exception Carved out from such a limitation is that, income chargeable to tax has escaped assessment by the reason of the failure on the part of the assessee to furnish the return u/s 139 or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment - The “reasons recorded” should clearly spell out what is the failure on the part of the assessee and it should provide direct link with the material brought on record and the income which has escaped assessment on the reason of failure on the part of the assessee. The limitation provided under the first proviso to section 147, is absolute and there is no escapement of limitation of four years unless the case falls within the saving clause as provided therein - The re-opening cannot be justified on the ground that notice u/s 148, has been approved by a higher authority, as held by the Commissioner (Appeals) - The jurisdiction can be acquired under the provision of the statute and not by sanction of any superior authority - the “reasons recorded”, neither there is any whisper about the failure on the part of the assessee nor there is any material to show on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing by the audit report, the profit of the assessee company should have been reduced by ₹ 78,34,362. However, in the statement of computation of income filed along with the return of income, the assessee has, instead of reducing, added back the amount of ₹ 28,09,709, to the total income with the following comments:- 16. Deviation u/s 145A of the I.T. Act, (Tax audit report u/s 44AB for this year clause 12(b) Page-no.10-Decrease in Profit of ₹ 78,34,362 - Net decrease in profit ₹ 50,24,643 considered in last year s income-tax return for accounting year 2000-2001) 2,809,719 Further as per Note-30, of the letter dt. 28.10.2002 filed along with the return of income, the assessee stated that the profit for the year has been increased by an amount of ₹ 28,08,709/- filed along with the return of income the assessee stated that the profit for the year has been increased by an amount of ₹ 28,08,709 but prayed that in view of the order of the ITAT, Bombay in the case of S.H. Kelkar Co. Ltd. v/s DCIT (Appeal no.9508 of 1991), the profit should not be increased by ₹ 28,09,719. In the computation of income too, filed along with the return of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning cannot be made after the expiry of four years from the end of the relevant assessment year in this case, as the assessment was made under section 143(3), as there is no failure on the part of the assessee to disclose fully and truly all material facts and secondly, the notice under section 148, has been issued on the basis of material already on record i.e., form 3CD and computation of total income which has already been scrutinised by the Assessing Officer during the course of the original assessment proceedings and, therefore, the re-opening is based upon change of opinion . These detail objections have been incorporated from Page-5 to 7 of the appellate order. Besides this, submissions were also made on the merits of the addition. 5. The learned Commissioner (Appeals) too rejected the assessee s contention on the legal issue of validity of re-opening under section 147., on the ground that the Assessing Officer noticed that the deduction had wrongly been granted to the assessee due to the claim made by the assessee in the audit report. Thus, this itself constitutes a valid ground and that there is prima-facie material for entertaining the belief that income has escaped a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come which has been wrongly allowed by the Assessing Officer and this amounts to failure on the part of the assessee to disclose fully and truly all material facts. 8. We have carefully considered the rival contentions, perused the relevant findings of the authorities below and the material available on record. In this case, the assessment has been completed under section 143(3), vide order dated 30th March 2005, after detail scrutiny and examination of records, which is evident from the fact that the Assessing Officer had made additions on various counts and discussed the entire assessment in 83 pages. Not only this, the issue on which the reasons have been recorded (for re-opening the case beyond the period of four years), has also been discussed by the Assessing Officer in the original assessment order vide Para-32 of the order, wherein he has discussed the impact of MODVAT credit on account of deviation under section 145A. He has also taken note of assessee s objection of the adjustment made under section 145A, in view of the tax audit by reducing the valuation of cost. In support, the assessee had also relied upon the decision of the Tribunal, Mumbai Bench, in case of Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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