TaxTMI 
TaxTMI 
TaxTMI 
2021 (7) TMI 1042
X X X X Extracts X X X X
X X X X Extracts X X X X
....g an addition of Rs. 96,36,129/- to the taxable income of the respondent after calculating depreciation (Rs. 9,08,897/-) and adjusting the brought forward losses of previous assessment year under Section 72 of the Act (Rs. 76,80,953/-), the income of the respondent was assessed at Rs. 10,46,779/-. The respondent challenged the Assessment Order before the Commissioner of Income Tax (Appeals)-XII. The Commissioner of Income Tax (Appeals)-XII was pleased to allow the appeal vide order dated 30.01.2009 and a relief of Rs. 12,94,257/- was granted to the respondent. It is only on 22.03.2011 that a notice under Section 148 of the Act was issued by the Assessing Officer to the respondent claiming that a deduction of franchise fee of Rs. 2,40,00,000/- paid by the respondent to M/s Satyam Cineplex Limited was wrongly allowed as it gave an enduring benefit to the respondent and was an expense of capital nature. It was stated that allowing depreciation at the rate of 25% amounting Rs. 60,00,000/-, balance amount of Rs. 1,80,00,000/- should have been added to the income of the respondent for the Assessment Year 2004-05. The said proceedings resulted in Assessment Order dated 19.12.2011 on the s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 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, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in section 148 to 153, referred to as the relevant assessment year) : Provided 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 section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: Provided further that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located out....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er who framed the original assessment has already applied his mind and come to a conclusion that payments are revenue in nature. Moreover this very issue of franchise payment has been accepted by the Department in the Asst. Year 200304 to 2009-10 which is as under:- S.No. A.Y. Franchisee Fee Claimed Franchisee Fee Allowed Assessed Assessing Authority 1. 2003-04 1925606 1925606 u/s 143 (1) ITO, W-9(4) 2. 2004-05 24000000 24000000 u/s 143(3) ITO, W9(4) 3. 2005-06 24000000 24000000 u/s 143(1) DCIT, Cir. 9(1) 4. 2006-07 24000000 24000000 u/s 143(3) Addl. CIT, R-9 5. 2007-08 24000000 24000000 u/s 143(1) DCIT, Cir.9(1) 6. 2008-09 11844819 11844819 u/s 143(3) DCIT, Cir.9(1) 7. 2009-10 9550033 9550033 u/s 143(1) DCIT, Cir.9(1) 9. In the order impugned before us, the learned ITAT has also observed as under: - "(4) We have heard both sides. We have perused the materials available on record, carefully. We have also considered the judicial precedents brought to our attention, at the time of hearing or referred to in the materials on record. We find that notice U/s 148 of I.T. Act was issued, thereby reopening the assessment, on 22.03.2011 whic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hese facts and circumstances, we hold that Revenue has failed to show that there was failure on the part of the assessee to disclose all material facts fully and truly. (4.2) When the assessee has filed a return u/s 139 of the Act or in response to sections 142(1) or 148 of the I.T.Act and when an assessment order u/s 143(3) or u /s 147 of the Act has already been passed then the assessee enjoys statutory protection under proviso to section 147 of the Act from any action u/s 147 of the Act after the expiry of four years from the end of the relevant assessment years; unless income chargeable to tax has escaped assessment by reason of failure on the part of the assessee to fully and truly disclose all material facts necessary for his assessment for that assessment year. Onus is on Revenue to show that there was failure on the part of the assessee to fully and truly disclose all material facts necessary for his assessment for that assessment year and in the instant case, Revenue has failed to discharge this onus. When it is not the case of the Revenue that there was failure on the part of the assessee to disclose all material facts fully and truly, Revenue cannot violate the statuto....
X X X X Extracts X X X X
X X X X Extracts X X X X
....orrect. His only submission is that the period of four years has to commence from the date of the decision in the appeal filed by the respondent against the earlier assessment order. For this purpose, he has placed reliance on the third proviso to Section 147 of the Act which has been reproduced hereinabove. In our opinion the said proviso does not in any manner extend the period within which action under Section 147 of the Act can be initiated by the Department. It merely empowers the Assessing Officer to assess or reassess such income, which is not involved or is the subject matter of any appeal, reference or revision, and has escaped assessment. It does not grant any further extension of time to the Department to initiate a proceeding under Section 147 of the Act. 11. It is also not disputed before us that for the assessment years 2003-04 to 2009-10 the claim of the respondent stood accepted. Though the learned counsel for the appellant has submitted that each assessment year would give a separate cause of action and decision taken in one assessment year cannot act as a res judicata in the other years, the same would also have a vital bearing in the adjudication of the present ....