9911796707
TMI Blog2024 (12) TMI 1420X X X X Extracts X X X X X X X X Extracts X X X X ..... This appeal filed by the revenue and cross objection filed by the assessee are directed against the order passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 07.03.2024 and pertains to assessment year 2009-10. 2. The revenue has raised the following grounds of appeal: 1. The order of the learned Commissioner of Income Tax (A) in ITA No.ITBA/NFAC/S/250/2023-24/1062197767(1) dated 07/03/2024for the assessment year 2009-10 is erroneous in law, facts and circumstances of the case. 2. The learned CIT(A) has erred in deleting the disallowance made u/s. 40(a)(ia) in respect of payment towards claim settlement under cashless scheme to Third Party Administrators(TPAs) by relying on the decision of the ITAT in the assessee's own case. The CIT(A) failed to note that the decision was not accepted by the department and filed further appeal with High Court, which is still pending. 3. For these and other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT (A) may be set aside and that of the Assessing Officer be restored. 4. The appellant craves leave to add or amend any ground of appeal before i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se payments were made for which no services were provided and also the payments are over and above the approved commissions as per the guidelines of IRDA. Hence these payments are to be disallowed and brought to tax. 3. Profit on sale of investments. 4. Amount paid to TPA Vendors like M/s.Paramount without deducting TDS andthese payments are to be disallowed u/s. 40(a)(ia). 5. Subsequently, the assessment was reopened and notice u/s. 148 dated 30/03/2016.The assessee company filed return on 07/12/16. The assessee requested reasons for reopening in response to the notice vide its letter dated 23/12/2016. Reasons for reopening the case were furnished to the assessee vide letter dated 18.12.2017. The assessee filed written submission vide its letter dated 19.12.2017 objecting to the reopening. The objection to reopening the case was heard and the same was disposed of vide speaking order dated 22.12.2017 by the AO. Thereafter, the case was heard on the merits of the case. After hearing the assessee, the AO has completed the assessment by making the following additions: Income as per order dated 30/12/2014: Rs.24,58,77,167/- Add: (i) Disallowance of expenses Rs. 3,80,80,209/- (ii) Disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f notice dt.30.03.2016 u/s. 148 of the Act is without jurisdiction and barred by limitation under the first proviso to section 147 of the Act. 8.1 Further, the Ld.AR stated that u/s 147, where an assessment is made u/s. 143(3) there can be no reopening of assessment after expiry of four years from the end of the relevant assessment year unless there is a failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. In the impugned order, four years from the end of AY 2009-10, i.e., 31.03.2010, expired on 31.03.2014 and notice u/s. 148 has been issued by AO on 30.03.2016, which is beyond the prescribed limitation period. The Ld.AR stated that the AO has not recorded/alleged any failure by assessee to fully and truly disclose all material facts in his reasons. 8.2 The Ld.AR submitted that reopening of assessment beyond four years can be done only when there is a failure to disclose fully and truly all material facts by the Assessee. Therefore, the reasons for reopening furnished by the AO ought to contain at least an allegation or a finding that the Assessee had failed to disclose fully and truly all material facts. It is submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons for reopening dt. 18.12.2017 have been inquired into during the course of the regular scrutiny assessment proceedings by way of issuance of notice u/s. 142(1) dt. 30.11.2012 and all relevant details were furnished by the Assessee vide its reply dt. 20.12.2012. Pursuant to such inquiry, no addition / disallowance was made in the scrutiny assessment order dt. 28.03.2013. The details of the said issues and the Assessee s corresponding reply to the same are set out below: a. Reason 1: Assessee s claim of depreciation @50% on vehicles for AY 2010-11 and 2009-10 when Assessee is eligible to claim depreciation only @15% as per the relevant provisions. i. It is submitted that the issue of the applicable rate of depreciation is exclusively a legal issue. Therefore, the AO, on the basis of same material furnished, coming to a different conclusion is nothing but a change of opinion and it cannot be said that the Assessee failed to fully and truly disclose any relevant material. b. Reason 2: Payments made by Assessee to Motor Vehicle Dealers. i. The said issue was inquired into by the AO in his notice dt. 30.11.2012 issued u/s 142(1) during scrutiny assessment proceedings under the query ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e granting sanction under section 151 of the Act. Therefore, even on this ground the reopening is without jurisdiction and hence prayed for quashing the order of the AO as lack of jurisdiction. 9. Per contra, the Ld. DR relied on the orders of the lower authorities and prayed for dismissing the CO and adjudicate the appeal of the revenue on merits. 10. We have heard the rival contentions, gone through the material available on record and orders of the authorities below. We note from the facts of the case for the impugned A.Y. 2009-10 as narrated in assessment order and the order of CIT(A) and in the original assessment order and reasons recorded that the reason itself speaks that the information is culled out by AO from the assessment records which was supplied by assessee and is part of return of income filed originally, which was the subject matter of assessment u/s. 143(3) and reassessment u/s. 143(3) r.w.s. 147 of the Act. Return of Income filed on 29.09.2009 Assessment order u/s. 143(3) 28.03.2013 Reassessment order u/s. 143(3) r.w.s.147 30.12.2014 We do not agree with the order of the Ld.CIT(A) in dismissing the grounds raised on the jurisdiction of reopening of the case of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Admittedly, the AO during the course of assessment proceedings was aware about the share application money received by assessee because the audited accounts were available before him during the course of original assessment proceedings. From the reasons recorded, there is no iota of thinking or words in the reasons recorded that there is any failure on the part of the assessee to disclose fully and truly all material facts relating to the income for the relevant assessment year. Admittedly the reopening is beyond 4 years because relevant assessment year involved is 2013-14 and notice u/s. 148 of the Act is issued on 29.03.2019, which means admittedly it is beyond 4 years. In our view, there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for framing of assessment and assessment was completed originally u/s. 143(3) of the Act and admittedly the reopening is beyond 4 years because notice u/s. 148 of the Act was issued on 29.03.2019, no reopening is possible. This view of ours 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 deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arat 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. 7.1 In view of above facts and circumstances, we are of the view that reopening is beyond 4 years and as the original assessment was framed u/s. 143(3) of the Act, the Revenue could not establish any failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment, the reopening in present case is bad in law. Hence, reopening is quashed and this jurisdictional issue is allowed in favour of assessee. 12. In view of above facts and circumstances, we are o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
