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TMI Blog2025 (3) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... /2005- 2006/I.T.A.No.76/2005-2006 filed by the respondent / assessee against the Assessment Order dated 07.03.2006 of the Appellate Commissioner, against the Assessment Order dated 28.03.2005 passed under Section 143(1) of the Income Tax Act, 1961. 3. The Appellate Commissioner had allowed the aforesaid appeal of the respondent / assessee against the Assessment Order dated 07.03.2006 insofar as i. Non-Recognition of Income from Non-Performing Assets for Rs. 4,38,95,858/- by following order dated 01.12.2004. ii. Expenditure relatable to exempt income for Rs. 30,58,660/-. 4. The dispute pertains to the Assessment Year 1997-1998. The respondent / assessee had filed a return of income on 25.11.1997. In the return of income, the respondent / assessee had declared a loss of Rs. 4,85,81,394/-. The said return was processed under Section 143(1)(a) of the Income Tax Act, 1961 on 01.07.1998. An amount of Rs. 5,94,33,892/- was added to the taxable income. It appears, the appellant had filed I.T.A.No.171/1998-1999 dated 22.01.1999. The Appellate Commissioner vide Order dated 22.01.1999 opined that Assessing Officer was free to examine the issue in the regular Assessment. 5. Thereafter, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31,13,223/- (as dealt in order dated 28.03.2002 for the Assessment Year 1996-1997). 4. write off amount - Rs. 1,32,56,081/- 10. Thus, total income of the respondent / assessee was redetermined as follows:- 11. As mentioned above, on further appeal, the Appellate Commissioner in I.T.A.(TR) No.59/2005-2006 (I.T.A.No.76/2005-2006) vide order dated 07.03.2006, partly allowed and partly dismissed the appeal of the respondent / assessee. 12. Snapshot of the order of the Appellate Commissioner is summarized in the following table:- Grounds Heading Order Result Ground No.1 Non-recognition of income from non-performing assets The Assessing Officer is directed to delete the addition made on account of income from Non-performing assets and modify the order. This ground of appeal is Allowed. Allowed Ground No.2 Expenditure relatable to exempt income The Assessing Officer is directed to modify the order. This ground of appeal is Allowed. Allowed Ground No.3 Disallowance of depreciation Having regard to the sum totality of facts, the Appellate Commissioner therefore confirmed the order of the Assessing Officer. This ground of appeal is Dismissed. Dismissed Ground No.4 Disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtain advances as detailed above in the table, which have been allowed. 17. It is submitted that the Appellate Tribunal has only referred to the 1st proviso to Section 147 of the Income Tax Act, 1961 but has ignored Explanation 1 to Section 147 of the Income Tax Act, 1961. It is submitted that mere production of Books of Account or other evidence from which material evidence could be gathered with due diligence or discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of 1st Proviso to Section 147 of the Income Tax Act, 1961. Hence, submits that the Impugned Order of the Tribunal has to be set aside. 18. Learned counsel for the appellant has placed reliance on the following decisions:- i. Phool Chand Bajrang Lal and others V. Income Tax Officer and others, [1993] 203 ITR 456 (SC) ii. Calcutta Discount Company Limited Vs. Income Tax Officer, Companies District, I and others, [1961] 41 ITR 191 (SC) iii. Amin's Pathology Laboratory Vs. P.N.Prasad and others, [2001] 252 ITR 673 (Bom.) iv. T.N. Power Finance and Infrastructure Development Corporation Limited Vs. Joint Commissioner of Income Tax, (2006) 280 ITR 491. v. First Leasi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .11.1997. 22. It is submitted that since the respondent / assessee had taken a bona fide stand that not only a sum of Rs. 594.33 lakhs (Rs.5,94,33,892/-) was not recognized as per the prudential norms of the Reserve Bank of India (RBI) but also a sum of Rs. 438.96 lakhs comprising of Rs. 179.12 lakhs under leasing Rs. 201.34 lakhs under Hire Purchase Rs. 17.50 lakhs under interest on Debentures and Rs. 41 lakhs under interest on Inter Corporate Deposit was not recognised as income in the current year. 23. It is submitted that in the return that was processed under Section 143(1) of the Income Tax Act, 1961 itself, the aforesaid sum of Rs. 594.33 lakhs was added and that the Appellate Commissioner vide Order dated 22.01.1999 in I.T.A.No.171/1998-1999 against the return that was processed under Section 143(1)(a) of the Income Tax Act, 1961 on 01.07.1998, given liberty to the Assessing Officer to examine the issue in the regular assessment. 24. It is submitted that during the regular assessment, all the information's were available and there was no suppression of any information that was required for completing the assessment under Section 143(3) of the Income Tax Act, 1961. 25. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 1997-1998. 31. As mentioned elsewhere above, the amount of Rs. 438.96 lakhs which was added in the Re-Assessment Order dated 28.03.2005 was the 1st item which was left out by the Assessing Officer while including the aforesaid sum of Rs. 5,94,33,892/- in the Order dated 01.07.1998 under Section 143(1)(a) of the Income Tax Act, 1961. 32. The option that was available at that point of time was to invoke jurisdiction under Section 263 of the Income Tax Act, 1961 as the Assessment Order that was passed on 14.03.2000 under Section 143(3) of the Income Tax Act, 1961, was both prejudicial to the interest of Revenue and erroneous. 33. Instead, an order came to be passed under Section 154 of the Income Tax Act, 1961 on 08.06.2000 by computing the income under Section 115JA of the Income Tax Act, 1961, resulting in refund of Rs. 21,51,179/-. 34. Against the aforesaid Order also, the appellant had the remedy under Section 263 of the Income Tax Act, 1961 as it resulted in wrongful refund of Rs. 21,51,171/- to the respondent / assessee. 35. Although Explanation 1 to Section 147 of the Income Tax Act, 1961 as it stood till 31.03.2021 stipulated that mere production of Books of Account or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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