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TMI Blog2024 (12) TMI 1420X X X X Extracts X X X X X X X X Extracts X X X X ..... a) 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 it is finally disposed off. 3. The Assessee has raised the following grounds of Cross objections: "The cross objections stated herein are without prejudice to each other. Issue 1-Jurisdiction for reopening assessment 1. The order of the Learned Assessing Officer ('AO') is erroneous, bad in law and is wholly without jurisdiction. 2. The reassessment is without jurisdiction and time barred since the same was initiated after four years from the end of the relevant AY and there has been no failure on the part of Appellant to disclose fully and truly any material record information during the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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) Disallowance u/s. 40(a)(ia): Rs.21,05,37,722/- Assessed Income : Rs.49,44,95,098 Aggrieved by the order of the AO, the assessee preferred an appeal before the Ld.CIT(A) and raised grounds both on legal issue of reopening of assessment beyond 4 years and also on merits. 6. The Ld.CIT(A), after hearing the assessee dismissed the ground of appeal raised on jurisdiction and allowed the appeal of the assessee by deleting the additions made by the AO on account of disallowance of expenses of Rs. 3,80,80,209/- and Disallowance u/s. 40(a)(ia)of Rs. 21,05,37,722/-. Aggrieved by the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9-10, 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 the absence of any such finding on the above jurisdictional fact would render the entire reopening void and a nullity. The aforesaid view has been taken by the Hon'ble Madras High Court in the case of Durr India (P.) Ltd. v. ACIT [2023] 152 taxmann.com 303 (Madras) [Pg. 180-191 of Assessee's pb dt. 09.08.24], wherein it was held as follows: "12. From the above decisions, it is clear that existence of ''jurisdictional fact'' is sine qua non for the exercise of power. If the jurisdictional fact exist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 regarding "expenditure incurred for the purpose of marketing" [Point No. 11, @ Pg. 4 of Assessee's PB dt. 09.08.24] ii. The Assessee provided the relevant details with regard to marketing expenditure, including payments made to motor vehicle dealers, in its reply dt. 20.12.2012 [Point No. 11, @ Pg. 7 of Assessee's PB dt.09.08.24] and Annexure 7 filed along with its reply [Examples of payments in Annexure 7 @ Pg. 96 to "Infinium Toyota", @Pg. 134 to "Ravindu Toyota", @ Pg.166 to "Toyota Kir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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 the assessee, because in the present case there is no question of disclosure or non-disclosure because the AO has not pointed out the failure on the part of the assessee to disclosure fully and truly all material facts relating to assessment in view of proviso. 11. In the present case, we note that all the four issues considered for reopening have been clearly taken from the records existing in the file of the AO. 1. Firstly, the Assessee's claim of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 decision of Hon'ble Allahabad High Court in the case of Foramer France vs. CIT, (2001) 247 ITR 436 by observing as under:- 14. Having heard learned counsel for the parties, we are of the view that these petitions deserve to be allowed. 15. It may be mentioned that a new Section substituted Section 147 of the Income-tax Act by the Direct Tax Laws (Amendment) Act, 1987, with effect from April 1, 1989. The relevant part of the new Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of the view that reopening is made beyond 4 years and as the original assessment was framed u/s. 143(3) and also reassessment was completed u/s. 143(3) r.w.s.147 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 and hence we are of the considered view that, the reopening in the present case is bad in law. Henc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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