TaxTMI 
TaxTMI 
2019 (9) TMI 653
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....g of assessment u/s 147. 2.1 The learned Commissioner of Income Tax (Appeals) failed to appreciate the fact that the re-opening was mere change of opinion as such, bad in law. 2.2 The learned Commissioner of Income Tax (Appeals) failed to appreciate the fact that the re-opening was based on existing material and evidences and not based on any new evidences 2.3 The learned Commissioner of Income Tax (Appeals) failed to appreciate the fact that the re-opening beyond 4 years is hit by the First Proviso to section 147. 2.4 The learned Commissioner of Income Tax (Appeals) failed to appreciate the fact that the matters with respect to which the additions have been made are subject matter of appeal before CIT(A) and Hon'ble ITAT and therefore, they cannot be considered in the re-assessment proceedings in view of the Third Proviso to Section 147. 3. The learned Commissioner of Income Tax (Appeals) erred in directing the Assessing Officer to classify rural branches as was done for AY 2010-11 for the purpose of Section 36(1)(vii). 3.1 The learned Commissioner of Income Tax (Appeals) erred in holding that some of the branches are not rural branches as per the definition of Sec....
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....ion 115JB of the Act are not applicable. But CIT(A) confirmed the reopening of assessment u/s. 147 of the Act and disallowance of claim u/s. 36(1)(viia) of the Act and partly allowed the appeal. 4.1. Aggrieved by the order of CIT(A), assessee preferred an appeal before the Tribunal on two issues being the reopening of assessment u/s. 147 of the Act and disallowance of claim u/s. 36(1)(viia) of the Act. 5. At the time of hearing, Ld.AR submitted that the original assessment was completed u/s. 143(3) of the Act on 31-01-2008, whereas notice u/s. 148 was issued on 25-03-2013, which is beyond a period of four years and the AO has made disallowance of claim u/s 36(1)(viia) of the Act. Ld.AR emphasized that the reasons for reopening was provided to the assessee and objections were filed, whereas the AO has dismissed the objections and confirmed the validity of re-opening of assessment. The contentions of learned AR are that the assessee-bank has disclosed the material facts necessary for assessment and there is no failure on the part of assessee-bank. Further the AO has not complied with the requirements of 1st proviso to Section 147 of the Act and re-opening of assessment. Ld.AR refer....
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....rovision for doubtful debt is expressly excluded from section 36(1)(vii), then such a provision cannot be claimed as a deduction under section 37 even on basis of 'real income theory' - Held, yes" and the learned DR prayed for upholding the order of the CIT(A). 7. We heard the rival submissions and perused the material on record and the information filed during the course of hearing. The sole matrix of the disputed issue is with respect to the validity of re-assessment u/s. 147 of the Act and issue of notice u/s. 148 of the Act. Ld.AR has vehemently argued that the assessee has disclosed full and complete information and furnished the details and there is no concealment of any particulars or income. Ld.AR referred to the plethora of decisions in paper book and relied on the jurisdictional Hon'ble High Court decision in the case of Venkatesh Power Works Vs. CIT (2005) [278 ITR 436] and also decision of Canara Sales Corporation Ltd., Vs. CIT [176 ITR 340] the observations are as under: ....................................................As explained earlier, the duty on the part of the assessee is to disclose fully and truly all material facts. Omission or failure to disc....
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.... as Rural Branches. The AO observed that the rural branch must be located in a place that is revenue village, however, the branches are situated in place which is defined as per Urban Agglomeration Census of India of 2001 as town Panchayats and Municipalities. Hence, the AO based on the information obtained from the scrutiny assessment proceedings for the AY. 2010-11 has re-opened the assessment and issued notice u/s 148 of the Act. Ld.AR referred to Page No. 90 of the Paper Book on the Branch Banking statistics information as on 31-03-2009 and the explanatory notes, which read as under: Explanatory Notes 1. Reference Period of data on all bank offices/branches prescribed in this volume relate to 31 March 2009, unless otherwise specified. 2. Population Group Classification of centres is based on 2001 population census data obtained from the Office of the Registrar General and Census Commissioner, Government of India. 3. The state-wise data on Average Population Per Bank Office (APPBO) and Average Population per Bank Branch (APPBB) presented in Table nos, 2 and 3 respectively are worked out based on estimated population as on 1st March 2009 received from the Office of the Reg....
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.... the AY. 2006-07 at Page No. 22 of the Paper Book, where the assessee has made disclosure of claim permissible u/s. 36(1)(viia) of the Act and the Revenue has not disputed such disclosure. We found strength in the submissions of the Ld.AR on validity of assessment u/s 147 of the Act in the assessee's own case and the Bank has disclosed the complete particulars/information. The Ld.AR has substantiated with voluminous material, which cannot be overlooked. We are of the substantive opinion that the bank is a public sector undertaking and has followed the RBI guidelines, which are mandatorily considered in the accounting system of bank and relied on the judicial decisions: i. Chaitanya Properties (P) Ltd., (2016) [67 taxmann.com 201] (Karnataka); ".................It is clear from a perusal of the order u/s. 143(3) of the Act dated 31.12.2007 that AO was fully aware of the fact that property at Whitefield which was held as investment got converted into stock-in-trade during the previous year relevant to A.Y. 2005-06. It is also clear from the order u/s. 143(3) of the Act that AO was fully conscious of the fact that property at Whitefield having been given under joint development ag....
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.... the Revenue". iii. Usha International Ltd., (2012) [25 taxmann.com 200] (Del)(FB); "13. It is, therefore, clear from the aforesaid position that: (1) Reassessment proceedings can be validly initiated in case return of income is processed under Section 143(1) and no scrutiny assessment is undertaken. In such cases there is no change of opinion; (2) Reassessment proceedings will be invalid in case the assessment order itself records that the issue was raised and is decided in favour of the assessee. Reassessment proceedings in the said cases will be hit by principle of "change of opinion". (3) Reassessment proceedings will be invalid in case an issue or query is raised and answered by the assessee in original assessment proceedings but thereafter the Assessing Officer does not make any addition in the assessment order. In such situations it should be accepted that the issue was examined but the Assessing Officer did not find any ground or reason to make addition or reject the stand of the assessee. He forms an opinion. The reassessment will be invalid because the Assessing Officer had formed an opinion in the original assessment, though he had not recorded his reasons". ....
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....on 36(1)(vii) and by allowing a proportionate deduction under Section 10(23G) on the basis of the ratio adopted in the earlier assessment................". vii. Reliance Energy Ltd., 2012 (12) TMI 379 - Bombay High Court; "..............Moreover, the Tribunal has also correctly held that the jurisdiction to issue a reopening notice for the assessment year 2001-02 is absent in view of the fact that the profits earned as determined under Section 80IA of the Act with regard to its Dahanu generation plant was the subject matter of appeal before the Commissioner of Income Tax (Appeals) and the Tribunal leading to order dated 02.08.2004 and 24.01.2008 respectively. Consequently, the original order of assessment dated 23.03.2004 had merged into the order of Appellate Authority interalia with regard to the profits earned from the power generation plant at Dahanu for the purposes of deduction claimed under Section 80IA of the Act. The jurisdiction to exercise powers of reopening and assessment is specifically barred in respect of any matter which has been a subject matter of appeal by the 3rd proviso to Section 147 of the Act........" viii. Chennai Garments 2015-TIOL-1899-HC-MAD-IT; ....