TaxTMI 
TaxTMI 
2018 (3) TMI 956
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....ncome on 29.7.2010 disclosing taxable income of R.275926.69 lakhs. The Assessing Officer, on perusal of the assessment record, noticed that income chargeable to tax has escaped assessment on account of incorrect valuation of closing stock of coal and incorrect allowance of depreciation on WDV of capitalized expenses of earlier yearsand Section 35E deduction not claimed by the assessee in its original return or in the revised return of income filed, non-application of statutory provision of Section 40(a) to expenses from which tax deductible at source was not deducted, non-application of provisions of section 43B of the Act, non-application of statutory provision of section 40(a)(ia) and incorrect claim of penalty expenses towards Service Tax. Therefore the Assessing Officer issued notice u/s.148 of the Act to the assessee on 01.07.2013. In response to the notice u/s.148 of the Act, the assessee submitted an objection to reopening of the assessment and furnished details to the Assessing Officer. The Assessing Officer passed order under section 147/251/154/143(3) of the I.T.Act dated 21.1.2014 and assesseed the income of the assessee at Rs. 289232.18 lakhs. 5. Aggrieved by the ord....
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.... A.R. to explain the reasons recorded for reopening the assessment, the ld A.R. demonstrated with copy of reasons recorded for reopening of assessment, which is as under: "REASONS RECORDED FOR RE-OPENING THE ASSESSMENT U/S.147. In the instant case, an assessment was framed u/s.143(3) on 30.12.2011 on a total income of Rs. 277887.33 lakhs and thereafter it was rectified u/s.154 on 28.03.2012 reducing the assessed income to Rs. 276372.97 lakhs. On perusal of record, the following issues has been escaped income to tax which is point-wise described below. 1. Non-deduction of tax at source. The tax auditor in form No.3CD in column-27(b)(i) certified that no tax has been deducted against IICM charges of Rs. 481.68 lakhs and rehabilitation charges of Rs. 5476.67 lakhs paid to its holding company Coal India Limited (CIL). Non-deduction of tax at source attracted the provision of section-40(a)(ia) of the I.T. Act,1961 which is not considered in the scrutiny assessment. 2. Valuation of closing stock. Schedule -3 to Profit & Loss account disclosed the value of stock of raw coal at Rs. 41440.84 lakhs. In schedule-P to 'Notes on Account&....
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....laim of expense towards penalty for service tax. The Tax Auditor in his certificate in form No.3CD at column-17(e)(i) had certified that Rs. 355.47 lakhs being penalty for service tax which is debited in P&L account. As per the provision contained in sec-37(1) of the I.T. Act,1961, no amount paid by way of penalty for violation of any law is an allowable expense. Thus, the amount of Rs. 355.47 lakhs has escaped assessment. Considering the above discussion, I have reason to believe that there is escapement of income on the above issues within the meaning of section 147 of the I.T. Act,1961. Hence, reassessment proceeding is initiated u/s.147 of the I.T. Act, 1961. Office is directed to issue notice u/s. 148 and serve on the assessee immediately." 10. We after verifying the reasons found that the Assessing Officer has recorded the reasons on six aspects and all these reasons recorded are based on the tax audit report and financial statements., which were verified by the Assessing Officer in the original assessment proceedings and the Assessing Officer has passed order u/s.143(3) of the Act after making additions and determined the total income. We found that the reassessm....
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.... merely because he did not express this in the assessment order, that by itself would not give him a ground to conclude that income has escaped assessment and, therefore, the assessment needed to be reopened. On the other hand, if the Assessing Officer did not apply his mind and committed a lapse, there is no reason why the assessee should be made to suffer the consequences of that lapse. 13. Further, the Hon'ble apex Court in CIT v. Kelvinator of India Ltd.: 320 ITR 561(SC) has held as under: "On going through the changes, quoted above, made to Section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, re-opening could be done under above two conditions and fulfillment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the- Act [with effect from 1April, 1989], they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to re-open the assessment. Therefore, post-lApril, 1989, power to re-open is much wider. However, one needs to give a schematic interpre....