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TMI Blog2022 (1) TMI 1049X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings. Once assessment is framed u/s.143(3) of the Act originally for assessment year 1990-91 and reopening notice dated 04.03.1997, which is beyond 4 years and there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment, the reopening cannot be held to be valid As per Hon ble Supreme Court in the case of M/s. Foramer France and Jurisdictional High Court in the case of M/s. RPG Transmissions Ltd [ 2003 (1) TMI 101 - SC ORDER ] we are of the view that there is no whisper in the reasons recorded that there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment and the assessment was framed u/s.143(3) of the Act and reopening beyond 4 years which is against the provisions of the Act. Accordingly, we quash the reassessment proceedings and allow the appeal of the assessee. - ITA Nos.: 780 And 781/CHNY/2001 - - - Dated:- 24-1-2022 - Shri Mahavir Singh, Vice President And Shri G. Manjunatha, Accountant Member For the Appellant : Shri C. Naresh, CA For the Respondent : Shri Clement Kumar Ramesh, CIT ORDER PER MAHAVIR SINGH, VP: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal to decide the validity of the reopening proceedings. 5. The original assessment for the assessment year 1990-91 was framed by the DCIT, Special Range-I, Madras u/s.143(3) of the Act, vide order dated 29.01.1993. Similarly for the assessment year 1991-92, the original assessment was framed by the DCIT, Special Range-I, Madras u/s.143(3) of the Act, vide order dated 04.03.1994. Subsequently, the ACIT, Large Tax Payer Unit, reopened the assessments in both the assessment years, recorded identical reasons except the quantum. The relevant reasons recorded in assessment year 1990-91 reads as under:- The reasons recorded for reopening the assessment for the AY 1990-91 is given under:- The assessee bank has been maintaining in its books of accounts under mercantile basis. However, while admitting the interest on securities for Income tax purpose, the assessee bank reduced the interest accrued due but not receipt from the interest credited to profit and loss account and offers the same on receipt basis. In this way, the assessee bank had reduced a sum of ₹ 28,89,48,379/- from the interest on securities for the asst year 1989-90 as interest accrued but not received. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew of directions of Hon ble Madras High Court in TCA Nos.478 479 of 2019, order dated 13.10.2020, we decide this issue. 6. Before us, Shri C. Naresh, CA, the ld.AR for the assessee argued that all facts relating to interest on securities, interest accrued but not received and the claim of depreciation on investment was very much available on record of the assessment and there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment. He stated that in the original assessment proceedings, the issue of interest accrued not received claimed as deduction in assessment year 1990-91 but not offered for assessment during the year as well as claim of depreciation on investment was considered by the AO during the original assessment proceedings. The ld.AR drew our attention to the original assessment order, wherein the interest credited to rebated interest account as in earlier years was added as appreciation in the value of securities as in earlier years. Similar are the facts in assessment year 1991-92. From the very reasons, the ld.AR argued that there is nowhere mentioned that there is 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 ..... sis. As the cash basis of accounting was regularly followed notwithstanding the change in the head of income, viz., from Interest on Securities to Business . 8.1 Even, depreciation (loss on revaluation) of investments as on 31.03.1990 is disclosed at page 59 of assessee s paperbook. The assessee has also computed Interest on securities on due and realisation basis and computed the entire amount which is enclosed in assessee s paperbook at page 63. We noted that these are sufficient details and sufficient disclosure for framing of assessment because these details were available before AO during original assessment proceedings. Once assessment is framed u/s.143(3) of the Act originally for assessment year 1990-91 and reopening notice dated 04.03.1997, which is beyond 4 years and there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment, the reopening cannot be held to be valid. This proposition is supported by the decision of Hon ble Supreme Court in the case of CIT vs. Foramer France, (2003) 264 ITR 566, wherein the Supreme Court has affirmed the decision of Hon ble Allahabad High Court in the case of Foramer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd of the relevant assessment year. The same view was taken by the Gujarat High Court in Shree Tharad Jain Yuvak Mandal v. ITO [2000] 242 ITR 612. 18. In our opinion, we have to see the law prevailing on the date of issue of the notice under Section 148, i.e., November 20, 1998. Admittedly, by that date, the new Section 147 has come into force and, hence, in our opinion, it is the new Section 147 which will apply to the facts of the present case. In the present case, there was admittedly no failure on the part of the assessee to make a return or to disclose fully and truly all material facts necessary for the assessment. Hence, the proviso to the new Section 147 squarely applies, and the impugned notices were barred by limitation mentioned in the proviso. 8.2 Furthermore, the ld.AR relied on the decision of Hon ble Madras High Court in the case of CIT vs. RPG Transmissions Ltd., [2014] 48 taxmann.com 57, wherein it was held as under:- 22. We find from the reasons set out in the assessment orders that the assessee has explained an disclosed the entire facts which would constitute a full disclosure and, therefore, we have no hesitation to hold that the reopening of assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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