TaxTMI 
TaxTMI 
2020 (7) TMI 539
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....de full and true disclosure during assessment proceedings and hence the reassessment proceedings are void ab initio. 2. On the facts and in the circumstances of the case and in law, Ld. CIT (A) has erred in making a finding that the issue of CSR expenses (Corporate Social Responsibility) of Rs. 7,04,01,602/- was examined during the initial assessment proceedings. As the issue was not examined by the AO in the initial assessment proceedings, the findings of CIT(A) regarding change of opinion is wrong and factually incorrect. 3. On the facts and in the circumstances of the case and in law, Ld. CIT (A) has erred in referring to the ITAT order against sec. 263 order for subsequent assessment year 2007-08 that two opinion are possible whereas in the present AY 2006-07 no opinion was formed by the AO. 4. On the facts and in the circumstances of the case and in law, Ld. CIT (A) has erred in not mentioning the relevance of 83 case laws mentioned in his appellate order. 5. On the facts and in the circumstances of the case and in law, Ld. CIT (A) has erred in not considering the Prior period expenses of Rs. 21,10,799/-. 6. On the facts and in the ....
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..... In this case, the original assessment order u/s 143(3) was passed on 30.12.2008. Subsequently, a notice u/s 148 was issued on 25.03.2013, therefore, the proviso to section 147 is applicable in the present appeal. In this background, the appellant has challenged the reopening of the assessment in ground no. 1 of the appeal. 4.1 The reasons recorded for reopening of the assessment communicated to the appellant vide letter dated 06.12.2013 of the AO are reproduced herein under:- "25.03.2013 In this case assessment u/s 143(3) was done on 30.12.2008 assessing the total income at Rs. 295,387,54,390/- it is further seen that: 1. The assessee had debited prior expenditure/income of Rs. 76,35,90,980/- ( expenditure debited to P & L 72,17.19,893/- + income debited to P & L : 4.18,71,083/- out of which only Rs. 75,17.57,115/- (net) was added back to the income of the assessee at the time of scrutiny. Since the total amount of prior period expenditure was Rs. 76,36,90,980/-, the balance amount of Rs. 1,18,33,565/- should also have been added back to the income of the assessee. 2. The assessee had debited Rs. 7,04,01,602/- for "Corporate Social Responsibili....
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....tions from the material on records or from any enquiry or research into facts or law- information need not to be from external source. This has been held in CIT & Anr Vs Rinku Chakraborthy (Kar) 56 DTR 227 & Kalyanji Mavji & Co. Vs CIT(SC) 102 ITR 287. Besides in the decisions ACIT Vs Kanga & Co. 2010-TIOL-464-ITAT-MUM with respect to reopening u/s 148 it is held that " Tangible material " need not be from outside the returned income . In this case in the details under the head " Other expenses" filed during the assessment proceedings an amount of Rs. 7.04,01,602/- was mentioned against the account head 'CSR expenses'. The exact nature of this expenditure could not be deciphered from the mere words 'CSR expenses'. This was not explained by the assessee in detail to allow an opinion to be formed w.r.t. its admissibility as deductible expenditure as wholly and exclusively for business purpose or otherwise. Nor there has been any other detail filed by the assessee to know the exact nature of expenditure claimed. This has also not been discussed in the assessment order. The arguments against other grounds of reopening submitted by the assessee also are devoid of merit. The objectio....
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....he issue of CSR expenses also there was no suppression of any material fact by the appellant at the time of original assessment proceedings. The order of Hon'ble ITAT quashing the order of CIT u/s 263 establishes that this was an issue on which two views were possible and, therefore, the CIT did not have jurisdiction u/s 263 on this issue. That brings the reopening on this issue within the definition of change of opinion. Moreover, there has been no non-disclosure of material facts. Therefore, the reopening does not survive on the said issue as well. 4.5 As regards the calculation mistake under rule 8D, the said issue falls under the domain of section 154 and not 148.There was no failure on the part of the appellant to disclose any material fact in respect of the said issue as well. Therefore, the reopening cannot be justified on the said issue as well. That leaves us with the second last issue of prior period expenses. The appellant had debited prior period expenses of Rs. 76,35,90,980/- and credited an amount of Rs. 1,18,33,865/-. The credit was on account of reversal of excess expenditure in earlier years and some was net debit of Rs. 75,17,57,115/- (76,35,90,980 - ....
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....ed prior period expenditure/income of Rs. 76.35.90.980 (expenditure debited to P& L: 72,17,19,893 + income debited to P & L 4,18,71,083/-). out of which only Rs. 75.17,57.115 (net) was added back to the income of the assessee at the time of scrutiny. Since the total amount of prior period expenditure was Rs. 76,36,90,980, the balance amount of Rs. 1,18,33,565 should also have been added back to the income of the assessee. The mistake resulted in underassessment of income of Rs. 1,18,33,565 consequent short levy of tax of Rs. 5297627 including interest. Under assessment of income 11833565 Tax @30% 3550070 Surcharge @ 10% 355007 Total 3905076 Add Edu cess @ 2% 78102 Total 3983178 Interest u/s 234B for 33 months 1314449 Total tax effect 5297627 The audit observation was communicated to the Department vide audit memo no. 75 dated 01.09.2009. Reply awaited." 4.6 From a perusal of the above, the appellant's contention gets further strengthened that there was no failure on its part to disclose fully and truly all the material facts as the audit raised is on the basis of facts available on record. In view of the same, the in....
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....m) 27. Bhor Industries Ltd, 267 ITR 161 (Bom) 28. Hindustan Lever Ltd, 268 ITR 332 (Bom ) 29. Bhogwati Sahakari Sakhar Karkhana Ltd, 269 ITR 186(Bom) 30. Ajanta Pharma Ltd. 267 ITR 200 (Bom ) 31. Grindwell Norton , 267 ITR 673 (Bom) 32. Feather Foam Ent.(P) Ltd. 296 ITR 342(Del) 33. Abdul Rahman Sail. 306 ITR 142 (Chennai) 34. Asteroids Trading and Investment P. Ltd, 308 ITR 190 (Bom) 35. Jyoti Devi. 218 CTR 80 (Bom) 36. Cartini India Ltd. 224 CTR 82 (Bom) 37. Mittal Casting Ltd, 124 Taxman 11 (Del) 38. Atma Ram Properties Pvt. Ltd. 343 ITR 141 (DEL) 39. Satnam Overseas. 228 CTR 121 (Del) 40. Ashok Mittal, 224 Taxman 55 (Del) 41. Orient Craft Ltd. 354 ITR 536 (Del) 42. Sheo Nath Singh. 82 ITR 148 (SC) 43. Ganga Saran & Sons (P) Ltd, 130 ITR 1. 11 (SC) 44. Birla VXL, 217 ITR 1 (Gujrat) 45. Multiscreen Media (P) Ltd. 324 ITR 54 (Bombay) 46. Garden Finance Limited, 268 ITR 48(Guj) 47. Kamlesh Sharma, 287 ITR 337 (Del) 48. Allana Cold Storage Ltd.. Vs. ITO 287 ITR 1 (Bom) 49. Asian ....
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.... 7. The ld CIT DR adverting to the first ground of appeal submitted that the ld CIT (A) has held that there was no non-disclosure of any material facts by the appellant. She submitted that the ground No. 1 before the ld CIT (A) was with respect to the limitation of the assessment order. She submitted that the ld CIT (A) could not have decided the issue, which was not raised before him in the ground of appeal. In nutshell her argument was that the assessee raised the ground of appeal that the order passed by the ld AO is barred by limitation but the ld CIT(A) has held that reopening is invalid as there was full and true disclosure by the assessee. She therefore, submitted that the order of the ld CIT (A) suffers from this infirmity. 8. The ld AR submitted that by challenging the limitation before the ld CIT (A) the assessee submitted that there is a complete full and true disclosure by the assessee therefore, time limit of this order as provided in the proviso to section 147 do not apply but reopening could have been done only within four years. He submitted that this was the ground of appeal before the ld CIT (A). The ld CIT (A) held that there is no non-disclosure of facts in ....
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....s confirmed. He further held that the issue of prior period expenses was also because of an audit objection. With respect to employees' contribution to the provident fund , ld CIT(A) held that the issue is covered in favour of the assessee by the decision of the jurisdictional High Court in 321 ITR 508. He therefore, held that when the issue is covered in favour of the assessee on merits by the order of the jurisdictional High Court reopening on that issue does not survive. He thereafter referred plethora of the judicial precedents and held that there was no 'non disclosure' on the part of the assessee. Even otherwise on our examination of the facts and the assessment order, we find that with respect to the CSR expenditure the ld AO himself refers to the details of 'other expenses' filed during the assessment proceedings. For prior period expenditure also the ld AO refers to the details filed and disallowance made during the regular assessment proceedings. With respect to the employee's contribution fund the ld AO refers to the information already available with the return of income. The disallowance u/s 14A was merely to correct the incorrect computation in the original assessment....