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TMI Blog2025 (4) TMI 1430X X X X Extracts X X X X X X X X Extracts X X X X ..... Where full and true disclosure of facts was made. 5) Where reasons were not recorded, sanction was not obtained u/s 151 and objections were not disposed or in the alternative were inadequately dealt with in violation of law. 6) Where the assessment re-opened was substituted by three further orders passed subsequent to the assessment. 7) Where proceedings were conducted without valid jurisdictions. 8) Where the previous orders were subjected to appeal. 9) Where notice was served after 31.03.2017 10) Where income was brought to tax in subsequent year. 11) Where there was uniform rate of taxation. GROUND NO 2: DISALLOWANCE OF COMMISSION EXPENSE OF Rs. The learned CIT(A) erred in law and facts in disallowing the payment of commission of Rs. 4,88,53,351/-, made in the course of business, wholly and exclusively incurred for the purposes of business, the liability for which had accrued, arisen and the payment for which was made after deducting tax at source and the genuineness of the expenditure was not doubted, merely and simply on the ground that the income relating to such expenditure was taxed in the subsequent following year A.Y 2011- 12 and further erred in ignor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 7.12,2012 further clarified that commission was paid to Maharashtra Enviro Power Ltd. during the year for procurement and service of order, The transaction on which commission is paid has been executed in subsequent year. So following the matching principal of accounting said commission amount is carried forward in the subsequent year in books of accounts. But as the same is due and incurred during the year the same has been claimed as expenses in the computation of income. The contention of the assessee is not acceptable, as the income from profits and gains of business or profession shall be computed in accordance with the provisions contained in section 30 to 43D of the I.T. Act. During the relevant accounting year any liability due or accrued (paid / not paid / payable) is required to be routed through Profit & Loss account. The amount of commission was not routed through Profit & Loss account, therefore, the same is not allowable as deduction in computation of income. The books of account of the assessee were certified by the Chartered Accountant, however, this issue was not reported in Tax Audit Report. In view of the above, deduction claimed by the assessee should h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This follow up / support includes visits to all areas which are in the remote places. This becomes economically viable for us as otherwise we would have to open our office near to customers place and also appoint sufficient staff for daily support. In addition to the above, a Commission of Rs. 48853351/- (Rupees Four Crores Eighty Eight Lakhs Fifty Three Thousand Three Hundred Fifty One Only) was paid to Maharashtra Enviro Power Limited during the year for commission due to them for procurement and service of order. The Transaction on which Commission is paid executed in subsequent year. So, following matching principal of accounting the said commission amount is carried forward in subsequent year in books of account. But as the same is due and incurred during the year, the same has been claimed as expense in the Computation of Income. We enclose herewith various documents in support of the amount paid to Maharashtra Enviro Power Limited (Page.244 to 287) * Negotiation and pre appointment correspondence * Agreement for Appointment as Liaison Agent * Various Correspondence for release of order from customer, confirmation of payment / terms, extension of delivery, payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : ............... Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: .......... Explanation 1.-Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso." [emphasis supplied]" 10. On similar situation, the Hon'ble High Court of Bombay in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the submission of the revenue that there was any suppression of material facts on the part of the assessee. Therefore, the impugned notice was to be set aside." 12. In another case of First Source Solutions Ltd. vs. ACIT in [2021] 438 ITR 139 (Bombay), the Hon'ble Jurisdictional High Court, held as under:- "11. Therefore, when the assessment is sought to be reopened after the expiry of period of four years from the end of the relevant year, the proviso to section 147 stipulates a requirement that there must be a failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that year. This stipulation does not govern a notice for reopening within a period of four years. In the case at hand, as noted earlier, there is not even a whisper about what fact was not disclosed. In our view, therefore, the notice to reopen under section 148 of the said Act itself was issued without jurisdiction. Consequently, the order passed also cannot be sustained." 13. Considering the facts of the case in totality, in light of the above discussion, we have no hesitation in setting aside the impugned notice u/s 148 of the Act thereby quashing the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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