TaxTMI 
TaxTMI 
2007 (7) TMI 256
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....the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in upholding the order of the Commissioner of Income-tax (Appeals) and accordingly the reopening of the assessment under section 147 read with section 148 is held as bad in law, even though the facts and circumstances of the case fall within the exemption provided in Explanation 1 to section 147 of the Income-tax Act, 1961?" 2. The facts leading to the above substantial question of law are as under:- 3. The assessee is a Company. It is a Government of India Undertaking. The relevant assessment year is 1997-98 and the corresponding accounting year ended on 31.03.1997. Regular assessment was completed on 30.03.1999 under Section 143(3) of ....
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....ed the order of the Commissioner of Income-tax (Appeals). Hence the present appeal by the Revenue. 4. Learned Standing Counsel appearing for the Revenue submitted that the interest accrued and receivable by the assessee company from another Government Company, Viz., M/s. Tamil Nadu State Civil Construction Corporation Limited, amounting to Rs.148.69 lakhs was omitted to be brought to tax. It is further submitted that the mere statement in the Annual Report about the conversion of the interest into loan and recognition of interest does not amount to full disclosure of the materials at the time of completing the assessment under Section 143(3) of the Income-tax Act. It is also further submitted that the present case would fall within the E....
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....hough Govt. have directed to treat the interest of Rs.297 lakhs due as loan since the borrower is a defaulter ab initio as a prudent measure and as per the prudential norms on income recognition issued by RBI the interest income received will be taken into account on realisation basis. The amount not taken into account is Rs.72.18 lakhs being the difference in interest provided by the Company and Rs.297 lakhs allowed by the Government and Rs.76.51 lakhs being interest at 12% on Rs.297 lakhs for 1995-96 and 1996-97 and penal interest. However a sum of Rs.15.39 lakhs being the toll charges received from STUs during the year 1995-96 has also been taken to revenue for 1996-97. As such the TNSCC amount not taken into account is Rs.148.69 lakhs".....
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....y during the course of original assessment proceedings. The conditions as enumerated in the proviso in the present case are not met with by the Revenue, while issuing notice under section 148 for reopening of assessment under section 147 of the Act. It is a fact that during the course of original assessment proceedings the information regarding interest accrued and receivable by the assessee from another Government Company i.e M/s. Tamil Nadu State Civil Construction Corporation Limited was very much available in the 22nd Annual Report, which was filed with the original return of income. In any case it cannot be said that the above income was not added during course of original assessment proceedings due to the failure on the part of the as....
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....quence of any information, that income has been under-assessed or income has escaped assessment. In the case of limitation, providing for a period exceeding four years, there should have been a failure on the part of the assessee to disclose fully and truly all material facts leading to the escapement of income. But as a result of the amendment brought with effect from April 1, 1989, the above distinction had been obliterated and the Assessing Officer could reassess the income as long as he had reason to believe that income chargeable had escaped assessment. The new law has inserted a proviso to section 147 in the following words: "Provided that where an assessment under sub-section (3) of section 143 or this section has been made for th....