TaxTMI 
TaxTMI 
2019 (1) TMI 287
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....e appeals ex parte qua the assessee. A.Y. 2004-05 : 3. The first issue raised in this appeal is against the initiation of re-assessment proceedings. 4. Briefly stated, the facts of the case are that the original assessment in this case was completed u/s 143(3) of the Incometax Act, 1961 (hereinafter also called 'the Act') on 28-12-2006, wherein the loss returned by the assessee at Rs. 10.53 crore was accepted. Notice u/s.148 dated 28-03-2011 was issued giving the following reasons, as reproduced from the assessment order : "The assessment under section 143(3) was completed in this case on 28/12/2006 wherein the loss returned by the assessee at Rs. 10,53,92,979/- is accepted. The assessee is a co-operative bank. It is noticed that, the assessee has made provision of Rs. 5,22,09,000/- on account of N.P.A., Rs. 13,23,80,669/- on account of overdue interest, and Rs. 24,95,800/- on account of loss on gout. securities in its profit and loss account. These provisions are not allowable as per Income Tax Act, 1961. However, no disallowance is made in the regular assessment on these accounts. During the course of assessment proceedings for A.Y. 2005-2006, ....
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....the time of its maturity or actual sale, thus, it cannot be said to be an investment of permanent nature. The profit or loss can be arrived only at the time of maturity or sale of the security. As such, the debit of loss in the middle, without actual sale or maturity, without any transfer, cannot be allowed. Being permanent investments, the securities have to be stilted at the purchase price, unlike trading assets or stock for which the bank can adopt the method of accounting based on cost or market value. Being a permanent investment, and not a trading asset, the provision made for loss in value of securities by marking securities to the market price as on the last day of the financial year is not an allowable deduction. The guidelines framed by the RBI and NABARD may be binding on the banks but do not have same effect as far as application of the Income Tax Law is concerned. The assessee has not submitted any proof during the course of assessment proceedings to show that the debts mentioned above are actually considered as bad and fully written. off in the books. It has failed to disclose fully and truly all material facts necessary for its assessment. Hence, the proviso....
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....d did not make any addition on such counts. The assessee raised a claim for deduction u/s.36(1)(viia) of the Act in the computation of total income filed with the return in response to notice u/s.148, which claim was jettisoned. The ld. CIT(A) deleted the addition of Rs. 13.23 crore, being, the only addition surviving from the reasons recorded by the AO. 7. Section 147 of the Act provides that: "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, assess 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...'. A bare perusal of the above provision manifests that the AO is fully empowered to bring to tax any other income which has escaped assessment and which comes to his notice subsequently in the course of proceedings u/s 147, apart from the income escaping assessment on which the AO formed reason to believe about the escapement of income and issued notice u/s 148. The use of words 'and' between the income es....
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....set aside. 9. Notwithstanding the above, it is noticed that the original assessment in this case was completed u/s.143(3) on 28-12-2006. Notice u/s.148 was issued on 28-03-2011. First proviso to section 147 provides 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'. A bare perusal of the proviso indicates that in the case of the earlier completion of assessment u/s.143(3), no action can be taken u/s.147 after the expiry of four years from the end of the assessment year, unless any income chargeable to tax has escaped assessment by reason of failure on the part of the assessee inter alia to disclose fully and truly all material ....
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.... 12. In the result, this appeal is allowed pro tanto. A.Y. 2006-07 : 13. The only issue raised in this appeal is against upholding the addition of Rs. 4,74,230/-. 14. Relevant facts of the addition are that the assessee credited Entry fees of Rs. 280/- and Nominal membership fee of Rs. 4,73,950/- to the Reserve Funds without routing it through the Profit and loss account. The AO treated these amounts as chargeable to tax. The ld. CIT(A) confirmed the addition by observing that such amounts was received by the assessee from the persons who became members of the society. 15. In the absence of any material coming from the side of the assessee supporting the claim for treating such amounts as not chargeable to tax, we uphold the impugned order to this extent. 16. In the result, this appeal is dismissed. A.Y. 2007-08 : 17. The only issue raised in this appeal is against the confirmation of addition of Rs. 1,97,08,972/- on account of provision of overdue interest. 18. The assessee made provision for overdue interest at Rs. 1.97 crore, which was disallowed by the AO. 19. We find that though there is a reference to disallowance of provision for overdue interest....