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TMI Blog2016 (7) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... Dated:- 4-7-2016 - Shri Rajpal Yadav, Judicial Member For the Revenue : Shri Prasoon Kabra, CIT-DR For the Assessee : Ms. Urvashi Shodhan ORDER The Revenue is in appeal before Tribunal against the order of the ld.CIT(A)-XI, Ahmedabad dated 28.03.2012 passed for the Asstt.Year 2003-04. 2. Sole grievance of the Revenue is that the ld.CIT(A) has erred in quashing reassessment order passed under section 143(3) r.w.s. 147 on the ground that the AO was not justified in reopening of the assessment. 3. Brief facts of the case are that the assessee has filed its return of income on 29.11.2003 declaring total loss at ₹ 1,03,97,752/-. The ld.AO has passed assessment order under section 143(3) on 8.3.2006 and determined the taxable income of the assessee at ₹ 1,85,44,720/- as against returned loss. The assessee also claimed exemption under section 10A which was disallowed by the AO, and such disallowance was worked out at ₹ 2,89,42,468/-. On appeal, the ld.CIT(A) deleted this disallowance. The AO, thereafter, recorded reasons and issued notice under section 148 on 22.3.2010. He was of the opinion that assessee has made payment of interest to a non-r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO. On the other hand, the ld.counsel for the assessee relied upon the orders of the ld.CIT(A). 7. I have considered rival contentions and gone through the record carefully. I find that on the strength of authoritative pronouncement at the end of the Hon ble High Courts as well as of the Hon ble Supreme Court, the ITAT in the case of Neptune Textile Mills Pvt. Ltd. Vs. ACIT passed in ITA No.2195/Ahd/2009 had made a lucid enunciation of the scope of section 147. I cannot do better than extracting the discussion made by the Tribunal in this regard. It reads as under: 7. We have considered the rival submissions and perused the material on record. In our considered view the reopening of the assessment is bad in law. For the sake of convenience we reproduce section 147 and proviso thereto:- 147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may subject to the provisions of sections 148 to 153 assess or re-assess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year. (viii) if assessment is done u/s 143(1), then whether the provision of section 149 are applicable. 8. If reasons recorded did not reflect these ingredients then reopening cannot be sustained. On the aspect of necessity to mention the failure of the assessee to disclose truly and fully all material facts necessary for assessment Hon. Allahabad High Court in CIT vs. Pradeshiya Industrial and Investment Corporation of Uttar Pradesh Ltd (2011) 332 ITR 324(All) has observed as under :- Admittedly, notice under section 148 of the Act was issued after the expiry of four years. The notice under the proviso of section 147 of the Act can be issued after the expiry of four years only in case where income chargeable to tax has escaped assessment by reason of the failure on the part of the assesses to make a return under section 139 or in response to a notice issued under subsection (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year. From the perusal of the reason recorded it is apparent that no case has been made out that the assesses had failed to disclose fully and truly all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhavesh Developers vs. A.O. Others (2010) 329 ITR 249 (Bom), noted that the recorded reasons did not show finding that there was a failure to disclose necessary facts. In that case assessee has claimed deduction u/s 80IB(10) for ₹ 3.85 crores which was allowed by the AO vide order u/s 143(3) and assessment was sought to be reopened after expiry of four years on the ground that the claim of deduction u/s 80IB(10) included ineligible items of other income such as society deposits, street parking charges, sundry balances, etc. Hon. Bombay High Court in the case of Bhavesh Developers vs. A.O. Others (supra) observed as under :- Held, allowing the petition, that ex facie, the reasons which had been disclosed to the assessee would show that the inference that the income had escaped assessment was based on the disclosure made by the assessee itself. The reasons showed that the finding was based on the details filed by the assessee and from the profits and loss account. Therefore, it was impossible for the Assessing Officer to even draw the inference that there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for its asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a), that judgment existed at the time when the AO took the decision u/s 143(3) and held the expenditure as current repairs allowable in the profit and loss account under section 143(3). Without there being material on record and an allegation of failure on the part of the assessee to disclose any material which could have made the AO to believe that expenditure so incurred was capital in nature, new view so taken for reopening of assessment would be only a change of opinion. Earlier same expenditure was held as revenue in nature and now considered as capital would be akin to reviewing his own decision on the subject. Hon. Bombay High Court in the case of ICICI Prudencial Life Insurance Co. Ltd. vs. ACIT (2010) 325 ITR 471 (Bom) also held that when there is no material on record and without there being any allegation of failure of the assessee to disclose such material fact, assessment cannot be reopened after four years. Hon. Gujarat High Court in Inducto Ispat Alloys Ltd. vs. ACIT (2010) 320 ITR 458 (Guj) and Nikhil K. Kotak vs. Mahesh Kumar (2009) 319 ITR 445 (Guj) also held that where the period of four years has expired from the end of relevant Asst. Year the proviso to section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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