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TMI Blog2016 (6) TMI 1214X X X X Extracts X X X X X X X X Extracts X X X X ..... er before the ld.CIT(A). The ld.CIT(A) has quashed the reassessment order by way of impugned order. The basic reason assigned by the ld.CIT(A) is that the assessment has been reopened by issuance of notice under section 148 of the Act after expiry of four years from the end of the assessment year. The AO, nowhere, alleged that the income has escaped assessment on account of failure of the assessee to disclose all material facts fully and truly. 4. We have considered rival contentions and gone through the record carefully. We 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. We 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned in the proviso if assessment is sought to be reopened after four years from the end of the relevant Asst. Year; (vii) in particular, whether there is any the failure of the assessee to disclose material facts fully and truly necessary for the assessment for that assessment 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 par! of the assesses to make a return under section 139 or in response to a notice issued under subsection (1) of section 142 or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng authority. Admittedly, the notice was issued after four years, therefore, the proceeding was barred by time and the Tribunal has rightly held so. For the reasons stated above, the appeal fails and is dismissed." Hon. Bombay High Court, in the case of 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 Rs. 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 asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power u/s 147 cannot be validly exercised. 9. In the present case there is a clear case of change of opinion. Even though reliance has been placed on the decision of Hon. Supreme Court in Ballimal Navalkishore and others vs. CIT (supra), 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 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5% 2920964 6030261 1484024 1872686 388662 Plant & - machinery 25% 21764331 148872479 24050143 39938661 15888519 Electrical installations 25% 23888614 46961459 11842335 14726442 2884107 Total excess depredation allowed: Rs.20956984 Total excess depredation allowed: The excess depreciation allowed, as worked but above, is required to be withdrawn. 3. Further, it is also seen that the interest expenses claimed by assessee include interest payment to LBBW, amounting to Rs. 41,27,287/-, which has been incurred as expenditure in foreign currency, on which no TDS has been made. Hence, this expenditure was required to be disallowed as the assessee has not complied with the provisions of Section 195 of the Act. 4. Hence, I have reason to believe that income chargeable to tax has escaped assessment in the form of under-assessment of income within the meaning as envisaged by section 147 r.w explanation 2(c)(i) & (iv) of the Act. Hence notice u/s148 is issued accordingly." 6. As observed earlier, the interdiction provided in the proviso appended to section 147 of the Income Tax puts an embargo upon the powers of the AO to issue notice ..... X X X X Extracts X X X X X X X X Extracts X X X X
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