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TMI Blog2018 (12) TMI 1445X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the AO u/s 147 after the expiry of four years from the end of the assessment year in question is clearly time barred and therefore, vitiated in law. AO initiated proceedings under s.147 read with proviso thereof solely on the grounds of retrospective insertion of clause (i) to Explanation 1 to Section 115JB of the Act whereby provisions for diminution in the value of any asset is required to be added to the book profit for the purposes of Section 115JB of the Act. As observed and as echoed in decision of Sadbhav Engineering Ltd. vs. DCIT [2014 (6) TMI 296 - GUJARAT HIGH COURT] and Vodafone West Ltd. vs. ACIT [2013 (7) TMI 536 - GUJARAT HIGH COURT], retrospective amendment in law does not give rise to any failure to disclose mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two of its overseas subsidiary and the addition has been made after considering various decision of judicial authorities. 4. Briefly stated, the assessee filed its return of income declaring Nil income for the AY 2005-06. The return was subjected to scrutiny assessment and the assessment was completed under s.143(3) of the Act on 31.12.2008 where the income was assessed at Nil as per the normal provisions of the Act, whereas the book profit for the purposes of MAT was simultaneously computed at ₹ 67,11,77,484/-. The aforesaid order was further rectified under s.154 of the Act and the book profit for the purposes of MAT was revised at ₹ 26,03,13,803/-. Subsequent to the completion of the assessment under s.143(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03/- in the proceedings under s.143(3) r.w.s. 147 of the Act. 6. In the first appeal, the CIT(A) reversed the action of the AO and held that proceedings under s.147 of the Act is not sustainable to give effect to the retrospective amendment in the provisions of Section 115JB of the Act. 7. Aggrieved by the relief granted by the CIT(A), the Revenue has preferred the appeal before the Tribunal. 8. While learned DR for the Revenue has relied upon the order of the AO. The learned AR for the assessee, on the other hand, placed reliance on the order of the CIT(A). Alleging wrongful usurpation of the jurisdiction under s.147 of the Act, the learned AR also referred to the cross objection of the assessee and submitted that notwithstanding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the conditions stipulated in the main provision thereof. The first proviso necessitates that action under s.147 of the Act is permissible in the case of completed assessment under s.143(3) of the Act after the expiry of four years from the end of the relevant assessment year only where any income chargeable to tax has escaped assessment by the reason of failure on the part of the assessee to inter alia disclose fully and truly all material facts necessary for assessment of the relevant assessment year. Thus the prerequisite under first proviso enjoins that unless there is a failure on the part of the assessee to disclose material facts fully and truly, the reopening is not permissible in law. If, in fact, income was found to be under-as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, vitiated in law. 12. The AO initiated proceedings under s.147 of the Act read with proviso thereof solely on the grounds of retrospective insertion of clause (i) to Explanation 1 to Section 115JB of the Act whereby provisions for diminution in the value of any asset is required to be added to the book profit for the purposes of Section 115JB of the Act. As observed in the preceding paragraphs and as echoed in decision of the Hon ble Gujarat High Court in the case of Sadbhav Engineering Ltd. vs. DCIT (2014) 45 taxmann.com 388 (Guj) and Vodafone West Ltd. vs. ACIT (2013) 33 taxmann.com 67 (Guj), retrospective amendment in law does not give rise to any failure to disclose material facts as contemplated in the first proviso. 13. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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