TaxTMI 
TaxTMI 
2014 (9) TMI 8
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....oceeding, specific query was made by the Assessing Officer with regard to the depreciation claimed by the Petitioner. The Petitioner filed details in respect of depreciation claimed. The Assessing Officer in the Assessment Order passed in October 1995 allowed the depreciation only to the extent of 25% in respect of three items where 100% depreciation was claimed. Besides, other issues were also considered by the Assessing Officer and the Petitioner's income was determined at Rs. 10.30 lakhs. 3 On 1st August 1996, a search was conducted on the Petitioner's premises under Section 132 of the Act. Consequent to a search, a notice dated 7th February 1997 was issued under Section 158BC of the Act, directing the Petitioner to file return of income for the block period 1st April 1986 to 1st August 1996, declaring its undisclosed income. The Petitioner duly complied with the directions and on 30th September 1997, the Assessing Officer passed an order for the block period from 1st April, 1986 to 1st August, 1996 i.e. Assessment Year 1987-88 to 1997-98. In the order dated 30th September 1997, in respect of Block Assessments additions were made by the Assessing Officer on account of....
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....e assessee for A. Y. 199394 u/s. 148 of the I. T. Act, 1961 as income of Rs. 38,65,986/for A. Y. 1993-94 has escaped assessment. In this regard, a letter dated 11.03.03 has been put up requesting CIT(C)III's sanction u/s. 151. CIT(C)III has accorded his approval for issuance of notice u/s. 148 vide letter dated 24.03.03. Accordingly, notice u/s. 148 is issued." 7 The Petitioner by its letter dated 23rd November, 2004, objected to the reasons recorded for issuing the impugned notice dated 26th March, 2003. The primary objections to reopening of the assessment for the Assessment Year 199394, were as under: (a) the impugned notice is time barred; (b) there was no failure to disclose true and complete facts necessary for assessment. Therefore, the reopening of assessment beyond a period of four years from the end of the Assessment order is without jurisdiction; and (c) there was no reason to believe that the income chargeable to tax has escaped the assessment inasmuch as the issue of depreciation was subject matter of consideration while passing the Assessment order under Section 143(3) of the Act. 8 On 6th December 2004, the Assessing Officer by order rejected....
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....ue and full disclosure at the time of regular assessment proceeding leading to the Assessment order in October 1995 for the Assessment Year 1993-94. Thus, the condition precedent to issue the impugned notice was satisfied. In view of the above, it is submitted that the Petition be dismissed. 11 It would be convenient to reproduce the relevant Sections of the Act which arises for our consideration in the context of the facts and the submission made before us. The relevant Sections are as under: Income escaping assessment. "Section 147:- If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assessee or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned. Provided that where an assessment under subsection (3) of section 143 or this section has been made for the relevant assessmen....
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....ent is fairly settled. A reopening of assessment can only be done if the Assessing Officer has reason to believe that income chargeable to tax has escaped assessment on the basis of some tangible material. However, such reopening of assessment is not in the nature of review and, therefore, such reopening is not permissible on mere change of opinion. Moreover, in cases where reopening of assessment is sought to be done beyond the period of four years from the end of the relevant assessment year, an additional requirement is to be satisfied viz: failure on the part of the assessee to truly and fully disclose all material facts for assessment. 13 So far as limitation for issue of reopening of assessment is concerned, Section 149 of the Act provides that the normal period for reopening of assessment is four years from the end of the relevant Assessment Years. This period is extended to six years where the income which is likely to escape the assessment is Rs. 1 lakh or more and to sixteen years, if it relates to income located outside India. Section 150 of the Act does away with the above bar of limitation, where the reopening notice under Section 148 of the Act has been issued in c....
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....venue is relying upon the aforesaid finding alone to reopen the assessment for the Assessment Year 1993-94 by the impugned notice. Mr. Suresh Kumar, learned Counsel appearing for the Revenue concedes that there are no directions in the order of the Tribunal dated 25th October 2002 being relied upon for the issue of impugned notice. However, it is submitted that the aforesaid finding in the order of Tribunal dated 25th October, 2002 entitles the Assessing Officer to issue the impugned notice. 16 Therefore, the issue for our examination is whether there is any finding in the order of the Tribunal dated 25th October, 2002 which is being given effect to and/or as consequence thereof, the impugned notice has been issued. It is only when the answer to the above question is in the affirmative i.e. there is a finding that the issue of impugned notice would be saved from the bar of limitation by virtue of Section 150(1) of the Act. 17 The issue of what is a 'finding' in an adjudicatory/ appellate order is no longer res integra. The Supreme Court while dealing with a provision similar to Section 150 of the Act found in Section 34(3) of the Income Tax Act, 1922 in ITO v/s. Murli....
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.... given full meaning, namely, that the finding is a finding necessary for giving relief in respect of the assessment of the year in question and the direction is a direction which the appellate or revisional authority, as the case may be, is empowered to give under the sections mentioned therein. The words 'in consequence of or to give effect to' do not create any difficulty, for they have to be collated with, and cannot enlarge, the scope of the finding or direction under the proviso. If the scope is limited as aforesaid, the said words also must be related to the scope of the findings and directions." 18 Our attention was also invited to the decision of this Court in Lotus Investments Ltd., v/s. G. Y. Wagh, Assistant Commissioner of Income Tax and Others - [2007] 288 ITR 459. In this case, the Revenue had issued notice on 30th March 2006, seeking to reopen assessment for the Assessment Year 1988-89 to 1999-2000 i.e. beyond a period of six years from the end of the relevant Assessment Year. So far as the Assessment Years 1988-89 to 1999-2000 is concerned, the revenue relied upon the order of the CIT(A) dated 24th December 2004 wherein it was observed as under:- " The ....