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TMI Blog2023 (6) TMI 869X X X X Extracts X X X X X X X X Extracts X X X X ..... riginal assessment. Reopening beyond period of four years - In terms of Proviso to Section 147 of the Act, once the assessment had been completed u/s 143(3) reopening is not permissible beyond four years from the end of relevant assessment year, unless income has escaped assessment by reason of failure of the assessee to disclose fully and truly all material/primary facts necessary for the assessment. There is no material facts brought on record by the A.O. to show that the assessee had failed to disclose fully and truly all material/primary facts necessary for assessment, on the contrary, additions have been made based on the revisit of the documents filed by the assessee himself i.e. audited financial statement and computation of income. Thus, the reassessment proceedings are barred by limitation. Decided in favour of assessee. - I.T.A. No. 672/DEL/2018 - - - Dated:- 6-6-2023 - DR. B. R. R. KUMAR, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR US, JUDICIAL MEMBER For the Assessee : Shri Himanshu Sinha, Advocate; Shri Bhuwan Dhooper, Adv. For the Department : Shri Ajay Kumar Sh. Sanjay Kumar, Sr. D. R.; ORDER PER YOGESH KUMAR U.S., JM This appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reassessment proceeding is a mere change of opinion. 7. That the Ld. AO / Ld. CIT(A) erred on facts and circumstances of the case and in law in disallowing / upholding the disallowance of provision for compensated absences amounting to Rs.3,26,22,752. 7.1. That the Ld. AO / Ld. CIT(A) erred in not appreciating that the said provision was created on scientific basis and therefore is an ascertained liability and represents liability in praesenti and therefore the said provision is allowable under section 37(1) of the Act. 7.2. That the Ld. AO / Ld. CIT(A) erred in making/upholding the above disallowance under section 43B(f) of the Act without appreciating that provisions of section 43B(f) were not applicable in the present case.. 8. That the Ld. AO / Ld. CIT(A) erred on facts and circumstances of the case and in law in disallowing / upholding the disallowance of provision for litigation and claims amounting to Rs.2,80,00,000. 8.1. That the Ld. AO / Ld. CIT(A) erred in not appreciating that above subject provision represents liability in praesenti and not liability de futuro. 9. That the Ld. AO has erred in facts and in law in charging interest un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations claims being unascertained liabilities, not deductible under the Act 2,80,00,000 6. The assessment order u/s 147/143(3) of the Act dated 30/03/2016 has been challenged by the assessee before the CIT(A). The CIT(A) vide order dated 13/11/2017, upheld the validity of the assessment proceedings and also sustained addition/disallowance made by the A.O. Aggrieved by the order dated 13/11/2017 the Assessee has preferred the present Appeal on the grounds mentioned above. Since, the Assessee in Ground No. 3 has challenged the impugned orders passed by the A.O. and the CIT(A) contending that the reassessment proceedings are barred by limitation in view of proviso to Section 147 of the Act, we deem it fit to take up first and adjudicate the said preliminarily issue in Ground No. 3 regarding validity of re-assessment. 7. The Ld. Counsel for the assessee vehemently submitted that the reassessment proceedings u/s 147 of the Act were initiated by the A.O. on 27/03/2015 i.e. four years from the end of subject assessment year, the sole basis for the Ld. A.O. to reopen the assessment was on the basis of annual accounts and existing assessment record of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in terms of proviso to Section 147 of the Act. b) There was no failure on part of the appellant to disclose material facts which is a condition precedent for initiating assessment proceedings in terms of proviso to Section 147 of the Act. c) Initiation of proceedings were, in any case, on mere change in opinion and/or difference of opinion which is not permissible in law; d) Reassessment proceedings have been initiated without there being any new tangible material/information and without forming independent reasonable belief that income of the appellant had escaped assessment which a pre-requisite condition for validly initiating proceedings under that section; e) Reassessment is illegal, since copy of sanction, if any, obtained under Section 151 of the Act has not been communicated to the appellant; 11. It is found from the above that, the reasons that re-assessment notice was issued on the basis of the same set of facts/materials which was already available and considered at the time of original assessment. The additions have been made on the basis of documents filed by the assessee i.e. audited financial statement and computation of income. The Ld. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of failure of the assessee to disclose fully and truly material facts relating to its assessment. The above said view is supported by following decisions:- Wei Inter trade (P.) Ltd. vs. ITO: [2009] 308 ITR 22 (Del) CIT vs. Indian Farmers Fertilizers Cooperative Ltd. [2008]171 Taxman 379 (Del) Haryana Acrylic Manufacturing Company vs. CIT: [2008] 308 ITR 38 (Del) Atma Ram Properties (P.) Ltd. vs. DCIT: [2011] 343 ITR 141 (Del) CIT vs. Purolator India Ltd.: [2012] 343 ITR 155 (Del) Best Cyber city India Pvt. Ltd. vs. CIT: [2019] 414 ITR 385 (Del) 15. By considering the above facts and circumstances and by following the above judicial pronouncements (supra) on the issue in hand, we find merit in the Ground No. 3 of the Appeal on the issue of limitation and in our considered opinion the order of the A.O. dated 08/11/2012 and the order of the CIT (A) dated 30/03/2016 are unsustainable on facts as well on law. Accordingly, the orders impugned are quashed and the Ground No. 3 of the Assessee is allowed. 16. Since, we have allowed the ground No. 3 of the Assessee on the point of limitation for invoking Section 147 of the Act, we refrain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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