TaxTMI 
TaxTMI 
2013 (5) TMI 616
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....opment Board Act, 1987, not liable to pay any income tax or other taxes in respect of its income, profits or gains. However, with effect from the assessment year 2003-04, such exemption was withdrawn. In other words, the petitioner was liable to pay regular taxes on its income for the previous year relevant to the assessment year 2003-04. 3.2 For the assessment year 2005-06, the petitioner filed its return of income on October 28, 2005 declaring a loss of Rs.14.91 crores (rounded off). Such assessment was taken in scrutiny. The Assessing Officer passed the order of assessment on December 31, 2007 under Section 143(3) of the Act, determining the total income at Rs.27.34 crores (rounded off). It is this assessment which the respondent seeks to reopen for which impugned notice came to be issued. 3.3 At the request of the petitioner, the respondent supplied the reasons recorded by him for issuing such a notice. Such reasons read as under : "The assessee company is engaged in the business of promoting, financing, constructing, sponsoring, researching, facilitating training, collecting data and such other initiatives for the development of dairy and other agricultur....
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....ve deduction. Thus, there was failure or omission on the part of the assessee to disclose fully and truly all material facts necessary for his assessment with in the meaning of provisions of section 147 of the Act. The provisions created earlier have already been charged to the profit and loss account from A.Y. 1990-91 upto F.Y. 2002-03 and thereby the assessee has already claimed the deduction in the respective financial years. Now, by claiming again the deduction of Rs.52,22,57,307/- by way of excess provision written back of earlier years, the assessee is claiming double deduction which cannot be allowed at all as per the provisions of the Act. In view of the above facts and circumstances, I have reason to believe that the income chargeable to tax has escaped assessment to the extent of Rs.52,22,57,307/- with in the meaning of section 147 of the IT Act-1961. I therefore issue notice u/s.148 of the IT Act, 1961 for A.Y. 2005-06 to the assessee after obtaining necessary approval of the higher authority. Issued notice u/s.148 of the Act accordingly." 3.4 Under a communication dated March 19, 2012, the petitioner raised objections to reopening of the assessment. S....
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....is. He submitted that provision was made at the time when the petitioner was not liable to pay any income-tax. Any reversal of such a provision even during the previous year relevant to the current assessment year, would not be covered under Section 41(1) of the Act. 6. On the other hand, learned counsel Mr.Parikh for the respondent opposed the petition contending - (i) For the period prior to the assessment year 2002-03, the petitioner was not subject to any tax and, therefore, had no liability to file return. The accounts of the petitioner, therefore, would not be available to the Assessing Officer. Under what circumstances the provision was made in the earlier years was, therefore, not a part of the assessment proceedings for the assessment year 2005-06 when the scrutiny assessment was framed. (ii) The petitioner did not give full details of the provision made and for what purpose the same was reversed. He pointed out that in the original assessment such claim was not scrutinised. (iii) Lastly, the counsel contended that the issues before this Court in the judgment dated March 24, 2011 in the case of this very assess....
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....r the income chargeable to tax can be stated to have escaped the assessment for the reason of the assessee failing to disclose fully and truly all material facts. If the Assessing Officer did not have the accounts for the earlier year, surely during the course of assessment, he could have called for such details. Having chosen not to do so, his attempt to reopen the just assessment after a period of four years from the end of relevant assessment year, must fail. (iii) Equally, we are convinced that under very similar, if not identical circumstances, this Court had in the case of this very assessee by judgment dated March 24, 2011 quashed one such notice for reopening the assessment for the year 2003-04. The Court held and observed as under : "10. A perusal of the reasons recorded indicates that the Assessing Officer has re-opened the assessment on two grounds. Firstly, on the ground that while computing the taxable income, from the net profit and income and expenditure account, the petitioner had deducted under the head "provision written back of Rs.47,40,43,904/-" (as per audit note No.10) of Notes forming the par....