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TMI Blog2014 (7) TMI 469X X X X Extracts X X X X X X X X Extracts X X X X ..... ard to depreciation in the computation for the purpose of section 11, is not a false claim as it has also been described in Commissioner of Income-Tax Versus Institute of Banking [2003 (7) TMI 52 - BOMBAY High Court] - the depreciation on the fixed assets has to be allowed on commercial principles even if the capital expenditure on the same has been held to be application of income under section 11 - there are absolutely no details as to which fact or material was not disclosed by the Petition that lead to its income escaping assessment - There is merely a bald assertion in the reasons that there was a failure on the part of the petitioner to disclose fully and truly all material facts thus, the order of the CIT(A) is upheld Decided against Revenue. - ITA No. 6251/Mum./2011 - - - Dated:- 19-6-2014 - Shri D. Karunakara Rao And Shri Amit Shukla,JJ. For the Petitioner : Mr. Morya Pratap For the Respondent : Mr. K.K. Vaid ORDER Per Amit Shukla, J. M. The present appeal has been preferred by the Revenue, challenging the impugned order dated 30th June 2011, passed by the learned Commissioner (Appeals)-I, Mumbai, for the quantum of assessment passed und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s UOI 199 ITR (43). Further, the assessee trust has offered ₹ 51,29,452 as deemed income under section 11(3) and the Assessing Officer allowed expenditure towards object of the trust for the year as application instead of treating the entire amount of as deemed income. I have therefore, reason to believe that the cause of escapement of income within the meaning of section 147 of the Income Tax Act, 1961, is failure on the part of the assessee trust to make full and true disclosure of the material facts as far as both the above issues is concerned. The sanction u/s 1511) of the Income Tax Act, 1961, is solicited for issuance of notice u/s 148 of the Act, from the DIT (Exemption) as the assessment for the year under consideration has been finalized u/s 143(3) of the Act, and a period of four years have lapsed from the end of the relevant assessment year. 3. The assessee, after obtaining the copy of the reasons recorded filed objections before the Assessing Officer for re-opening the case, vide letter dated 27th December 2010, mainly on the ground that there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1993] 199 ITR 43 (SC), which envisages that no double deduction should be allowed. He submitted that the Assessing Officer has mentioned about the failure on the part of the assessee to make full and true disclosure of the material facts reasons recorded and, therefore, re-opening cannot be held to be invalid. 6. We have carefully considered the rival contentions, perused the relevant findings of the authorities below and the material available on record. In the present case, the assessment had already been made under section 143(3), vide order dated 13th March 2006. The re-opening has been made after expiry of four years from the end of the relevant assessment year and, therefore, the validity of re-opening has to be examined within the ambit of proviso to section 147. It is trite law that under the proviso to section 147, no action shall be taken for re-opening the case under section 147, wherein the assessment has been made under section 143(3) or 147, after the expiry of four years from the end of the relevant assessment year. Such a bar of limitation for re-opening the case beyond the period of four years, in such a case, is relaxed only under twin conditions, firstly, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aping assessment. In the present case, the claim of depreciation on the assets, has been completely set out in the balance sheet and in the income and expenditure account filed by the assessee along with the return of income, which has also been examined by the Assessing Officer in scrutiny proceedings. Thus, we do not find any failure on the part of the assessee to disclose fully and truly, relevant material facts on this score. In any case, the claim made by the assessee with regard to depreciation in the computation for the purpose of section 11, is not a false claim because the decision of Jurisdictional High Court in Institute of Banking (supra), has held that the depreciation on the fixed assets has to be allowed on commercial principles even if the capital expenditure on the same has been held to be application of income under section 11. Thus, the assessee s claim cannot be held to be false. Similarly, regarding the second issue, from the records, it is seen that the assessee has itself disallowed the amount of ₹ 51,29,452, as deemed income under section 11(3) and also offered the amount for tax. Even otherwise also, what is the failure on the part of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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