2021 (10) TMI 1266

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....I-T Act, 1961 for an amount of Rs. 200734588/-. Assessee created provision for standard asset/advances under the General loan loss provision excluding provision for NPA and claiming deduction under Section 36(1) (viia) of the I-T Act, 1961. In this way the assessee banking company was putting aside money by creating provision for standard asset/advances to meet unascertained liability.   2. The case was reopened and notice dated 5/3/2013 under Section 148 of the Act was issued. By order dated 17/2/2014 Assessing Officer reassessed the income under Section 143(3) of the Act. Aggrieved by this order appeal was filed with the Commissioner of Income Tax(Appeals) (for short, CIT (A)) by respondent. CIT(A) by order dated 30/12/2014 partly a....

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.... Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT was justified in annulling the reopening of the assessment under Section 147 of the Act without appreciating the fact that the assesee is not entitled for the deduction under section 36(1) (viia) of the I. T. Act, 1961 amounting to Rs. 17,95,94,700/-within the meaning of sub clause (a) of Section 36(1) (viia) of the I. T. Act, 1961 in the absence of any advance made by the rural branches of the assessee bank ? d) Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT has failed to appreciate the fact that reopening of the assessment was not done in view of the Revenue Audit Objection per se but in view of the clear position of....

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.... the provisions specifically detailing its functions in the Internal Audit Manual Vol. 2, we hold that the opinion of an internal audit party of the Income-tax Department on a point of law cannot be regarded as "information" within the meaning of section 147(b) of the Income-tax Act, 1961" 5. In Indian and Eastern Newspaper Society (supra), the court further held that in every case, the Income Tax Officer must determine for himself what is the effect and consequence of the law mentioned in the audit note and whether in consequence of the law which has come to his notice he can reasonably believe that income had escaped assessment. The basis of his belief must be the law of which he has not become aware. The opinion rendered by the audit pa....