TaxTMI 
TaxTMI 
2020 (8) TMI 465
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.... ice cream. For giving the freezers, the assessee was collecting deposits, which were refundable on termination of the dealership. The assessee as per the terms of agreement (entered between the assessee and dealer / distributor), could recover 25% of the deposit each year towards wear and tear, when agreements were terminated. According to the assessee, such recoveries were offered as income in the year in which the dealership was terminated and such recovery was made. The Revenue was of the view that 25% of the deposit should be treated as income in each year irrespective whether the dealership was terminated or not. 3.1 In the original assessment completed u/s 143(3) of the I.T.Act (order dated 29.12.2012), the Assessing Officer had made an addition of Rs. 20,16,542, being lapsed liability towards freezer security deposit. The addition made by the Assessing Officer was deleted by the CIT(A) vide order dated 28.01.2013. The CIT(A) deleted the addition by following the ITAT order in assessee's own case for the earlier assessment years. The department appeal as against the order of the CIT(A) was dismissed by the Tribunal in ITA No.311/Coch/2013 (order dated 29.07.2013). 4....
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....d a period of 4 years, especially so, when the assessment has been completed u/s.143(3) and the issue has been considered by the AO during original scrutiny proceedings. Thus, on the facts of this case, in my opinion, the reassessment u/s. 147 is bad-in-law and needs to be quashed." 5.2 With reference to the issue on merits, the CIT(A) followed the order of the ITAT in assessee's own case. The relevant finding of the CIT(A) reads as follow:- "7. On merits also, the issue of taxing the freezer deposits stands covered in favour of the appellant by the order of Hon'ble ITAT, Cochin Bench, in its own case for the instant Assessment Year itself. Understandably, the Department is in High Court on this issue. Until Hon'ble High Court reverse the order of the Hon'ble ITAT, the order of the Hon'ble ITAT stands good." 6. Aggrieved by the order of the CIT(A), the Revenue has filed the present appeal before the Tribunal. The learned Departmental Representative strongly supported the assessment order and relied on the grounds raised. 6.1 The learned AR filed a brief written submission, which reads as follow:- Issue before ITAT 1. Whether the reopening....
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....ecorded for reopening that there was failure on the part of the assessee to disclosure fully and truly all material facts. The Hon'ble Kerala High Court in the case of IBS Software Services Private Ltd v. UOI ( 379 ITR 66) held that "There are only two conditions to be satisfied according to section 147 of the Income-tax Act, 1961, that is, escapement of income chargeable to tax and reason available with the Assessing Officer to believe that chargeable income has escaped assessment. However, when the reassessment is attempted after the period of four years, necessarily, the question of absence of full and true disclosure by the assessee of material facts becomes relevant." It was further observed by the Hon'ble High Court that "If essential and basic documents which are to be necessarily examined before grant of exemption, were not gone into, it is the default of the officer and not the assessee........". 7.1 The Hon'ble Kerala High Court in the case of CIT vs Hindustan Latex Lid ( 389 ITR 407) held that "It has to be pointedly noted here that action under the first proviso to Section 147, that is to say, for a period after the expiry of four years, can be generated onl....
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....us, the re-opening was on a change of opinion. The Hon'ble Apex Court in the case of ITO vs Techspan 1ndia Private Ltd and another ( 404 1TR 10) has held as follows:- "The language of section 147 of the Income-tax Act, 1961 makes it clear that the Assessing Officer has the power to reassess any income which has escaped assessment for any assessment year subject to the provisions of sections 148 to153. However, the use of this power is conditional upon the fact that the Assessing Officer has some reason to believe that income has escaped assessment. The words "reason to believe" in section 147 have to be interpreted schematically as a liberal interpretation would have the consequence of conferring arbitrary powers on the Assessing Officer who may even initiate reassessment proceedings merely on his change of opinion on the basis of the same facts and circumstances which have already been considered by him during the original assessment proceedings. Such could not be the intention of the Legislature. Doing so would have the effect of giving the Assessing Officer the power of review. Section 147 confers the power to reassess and not the power to ....