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TMI Blog2017 (1) TMI 1657X X X X Extracts X X X X X X X X Extracts X X X X ..... ge. Despite the above, the Assessing Officer, while framing scrutiny assessment under Section 143 [3] of the Act did not make any disallowances under Section 14A of the Act. Under the circumstances, it cannot be said that there was any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. Assumption of jurisdiction to reopen the assessment beyond the period of four years is without jurisdiction and contrary to the provisions of Section 147 - Decided in favour of assessee. - SPECIAL CIVIL APPLICATION No. 14693 of 2016 - - - Dated:- 12-1-2017 - Mr. JUSTICE M.R. SHAH AND Mr. JUSTICE B.N. KARIA For the Respondent : Mr TUSHAR P HEMANI , ADVOCATE, Ms VAIB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legation that income chargeable to tax as escaped assessment within the meaning of Section 147 of the Act. At the request of the assessee , the Assessing Officer has furnished the reasons recorded to reopen the assessment for AY 2009-2010, which read as under : 2. In this connection, the reasons for reopening as per file are as under : In this case, return of income declaring total income of ₹ 11,44,110/- was filed on 31/07/2009. The return of income was processed u/s. 143 (1) of the Act. Subsequently, the case was selected for security through CASS and order u/s. 143 (3) was passed on 09/11/2011 at returned income shown by the assessee . On verification of case records, it is found that the assessee had made investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts, and therefore, assumption of jurisdiction by the Assessing Officer is bad in law and/or contrary to the provisions of Section 147 of the Act. It was further submitted that in fact, the assessee did not made a claim of ₹ 21.59 lacs as deductible expenditure, and therefore, it was submitted that the reasons recorded by the Assessing Officer for issuing impugned notice lack validity. 2.3 That thereafter, the Assessing Officer disposed of the said objections vide communication dated 10th August 2016 and has not agreed with the objections raised by the assessee by further submitting that the facts stated by the assessee warrant verification for which re-assessment shall have to be continued. Hence, the petitioner has p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disclose fully and truly all material facts necessary for assessment for the year under consideration. 3.3 It is further submitted by Shri Tushar Hemani , learned counsel appearing on behalf of the petitioner that even otherwise, the Assessing Officer has sought to reopen the assessment on the ground that assessee had not made disallowance under Section 14A read with Rule 8D, even though he enjoyed exempt income, and therefore, disallowances worked out at ₹ 15,62,757/- has escaped the assessment. It is submitted that as such the petitioner had incurred interest expenses of ₹ 21,59,130/-, no deduction was claimed in respect of the same while filing the return of income. It is submitted the Section 14A of the Act pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer consciously chose not to make any such disallowance , while framing the assessment under Section 143 (3) of the Act. It is submitted that on the aforesaid ground also, the impugned notice and the reopening of the assessment deserves to be quashed and set-aside. 3.5 Making the above submissions and relying upon decision of Division Bench of this Court in the case of Mitul Gems vs. Assistant Commissioner of Income-tax, reported in [2015] 62 Taxmann .com 66 [Gujarat], it is requested to allow the present petition. 4. The present petition is vehemently opposed by Shri Manish R. Bhatt , learned senior advocate appearing on behalf of the Revenue. It is vehemently submitted by Shri Bhatt , learned counsel for the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssary for the assessment, it is not open for the Assessing Officer to assume jurisdiction to reopen the assessment beyond the period of four years. In the present case, at the time of original assessment, which was a scrutiny assessment under Section 143 [3] of the Act, the assessee disclosed interest expenses of ₹ 21,59,130/- in the Profit Loss Account and investment of ₹ 7.14 Crores in the Balance-sheet. The assessee also disclosed in the return of income, the exempt income of ₹ 7,31,122/-. The assessee also furnished details of investment at the original assessment stage. Despite the above, the Assessing Officer, while framing scrutiny assessment under Section 143 [3] of the Act did not make any disallowances ..... X X X X Extracts X X X X X X X X Extracts X X X X
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