TaxTMI 
TaxTMI 
2011 (5) TMI 699
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....003-03 was processed by the department by issuance of notice under section 143(2) of the Act. After considering various submissions of the petitioner company and its representative Chartered Accountants, details of business activity, bank accounts, creditors, sales and purchases, closing stock, details of expenses etc. were furnished and the documents were test checked by the Assessing Officer. Ultimately, the Assessing Officer framed assessment under section 143(3) of the Act on 30.11.2004 after making ad-hoc disallowance of Rs.50,000/- on account of expenses claimed by the petitioner. 5. Subsequently, the Commissioner of Income Tax initiated revision proceedings under section 263 of the Act for disallowing expenditure debited to advertisement expenditure in respect of gift articles given to all customers so as to induce them for being guests repeatedly at the petitioner's hotel/liquor shop. The Commissioner passed order under section 263 of the Act on 22.3.2007 directing the Assessing Officer to reframe the assessment de novo. 6. The petitioner went in appeal before the Tribunal against the order of the Commissioner under section 263 of the Act, which came to ....
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.... assumption of jurisdiction on the part of the Assessing Officer is invalid. 10. Referring to the reasons recorded, it was submitted that the first reason for reopening the assessment is in respect of the advertisement expenses incurred by the petitioner which was subject matter of revision under section 263 of the Act by the Commissioner and was set aside by the Tribunal and that the said order of the Tribunal had been confirmed by the High Court. It was further submitted that there is total absence of any genuine reason to believe on the part of the Assessing Officer, since the belief of the Assessing Officer is based on the fact that in the last year, the gift articles expense was Nil, which is factually incorrect. Attention was invited to the notice under section 142(1) of the Act issued in respect of the assessment year 2001-02, to point out that the petitioner at the relevant time had submitted details of advertisement expenses. 11. It was further submitted that the other ground on which the assessment is sought to be reopened is on the ground that certain additions were made in assessment year 2006-07 disallowing the repair and maintenance expenses of Rs.....
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....e to tax has escaped assessment, and secondly, that such escapement is by reason of failure on part of the petitioner to furnish return of income under section 139 or in response to notice issued under sub-section (1) of section 142 or section 148 of the Act or that there is failure on the part of the petitioner to disclose fully and truly all material facts. In the present case, it is not the case of the respondent that the petitioner has not filed the return as envisaged under the proviso to section 147 of the Act. In the circumstances, for the purpose of assuming valid jurisdiction under section 147 of the Act, the respondent is required to establish that there is failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment. 14. The reasons recorded by the Assessing Officer for reopening the assessment runs into several pages. However, the relevant part thereof reads as under: "[1] The assessee company is running hotel and liquor shop at Surat. The return of income for the A.Y. 2002-03 was filed on 28.12.2002 showing total income at Rs.1,49,980 as against total turnover of Rs.3.95 Crs. [2] The mai....
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.... the petitioner before the Income Tax Appellate Tribunal, who by an order dated 14.9.2007, allowed the appeal and set aside the order passed by the Commissioner. The revenue failed in its appeal against the said order of the Tribunal filed before the High Court. Thus, insofar as the expenditure incurred towards advertisement expenses of Rs.26,10,975/- is concerned, the same was already subject matter of revision as well as further appeal before the Tribunal. In the circumstances, once the petitioner has succeeded up till the stage of High Court in respect of the said item, it is not open to the Assessing Officer to reopen the assessment on the said ground. 17. Insofar as the second ground is concerned, the Assessing Officer has merely placed reliance upon an order passed in relation to assessment year 2006-07 without indicating any connection between the assessments of the present year and the said year. Moreover, the frame of the reasons indicates that according to the Assessing Officer, the same is required to be considered for assessment year 2002-03 after due investigation. 18. This Court in the case of Shankarlal Nagji and Co. and others v. Income Tax Offic....