AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (4) TMI 1173
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....il) no.3 of 2020, the learned DR submitted that the limitation period for filing the appeal was extended upto 29/05/2022, and the Revenue filed the present appeal on 27/05/2022. Thus it was prayed that the present appeal be heard on merits. The learned Authorised Representative ("learned AR") did not raise any objection against the prayer for condonation of delay. In view of the above, since the present appeal has been filed within the extended time granted by the Hon'ble Supreme Court during the Covid period, therefore there is no delay in filing the present appeal and we proceed to decide the same on merits. 3. In this appeal, the Revenue has raised the following grounds:- "(1) On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in allowing the interest expenditure of Rs.10,84,88,390, as business expenditure, without appreciating the fact that the stated business activity of the assessee company has not commenced, which is evident from the fact that the assessee has not disclosed any income from its stated business activity and has not shown any balance in its work-in- progress account in the balance sheet. (2) On the facts and in the circu....
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....ly, vide notice dated 29/03/2019 issued under section 148 of the Act reassessment proceedings were initiated in the case of the assessee. In response to the aforesaid notice under section 148, the assessee e-filed its return of income on 23/04/2019, declaring a net loss of Rs.35,66,74,501. The assessee sought the reasons recorded by the AO while reopening the assessment. Accordingly, the reasons are provided to the assessee vide letter dated 21/09/2019. Vide its submissions dated 27/09/2019, the assessee filed its objections against the reopening of assessment under section 147 of the Act, which was disposed off by the AO vide order dated 25/11/2019. Pursuant thereto statutory notice under section 142(1) of the Act was issued and various details were sought from the assessee, which was duly responded to by the assessee. The AO vide order dated 30/12/2019, passed under section 143(3) r/w section 147 of the Act held that the assessee has failed to substantiate that the income shown by the assessee in its profit and loss account pertains to its business activity of development of real estate. The AO disallowed the business expenditure claimed by the assessee in the absence of any busi....
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....d. Thus, it is not a case wherein the jurisdictional issue has been raised for the first time before us vide petition filed under Rule 27 of ITAT Rules, 1963. Therefore, the petition filed by the assessee under Rule 27 of ITAT Rules, 1963 is admitted for adjudication. 10. In the present case, vide order dated 20/02/2015 passed under section 143(3) of the Act, the AO accepted the returned income of the assessee and assessed the loss at Rs.35,66,74,501. However, after the expiry of 4 years from the end of the relevant assessment year, the AO vide notice dated 29/03/2019 issued under section 148 of the Act initiated reassessment proceedings in the case of the assessee. While initiating the reassessment proceedings, the AO recorded the following reasons for reopening the assessment: "As per the PAN database, the jurisdiction over the present assessee is lying with this charge. The assessee had filed its return of income on 27.09.2012, declaring net loss at Rs.35,66,74,501/-. The assessment was completed u/s.143(3), assessing the net loss at Rs.35,66,74,501/-. Thereafter, a search action was carried out in the case of Indiabulls Group on 13.07.2016. Consequent thereto, the case was c....
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....to issue notice u/s.148 is being obtained separately from the Principal Commissioner of Income Tax (Central)-3, Mumbai as per the provisions of Section 151(1) of the Act. 11. Thus, from the perusal of the profit and loss account, the AO alleged that the credit of Rs.19,52,87,176 reveals that the same cannot be attributed to assessee's business. Therefore, the AO inferred that the assessee has not carried out any business activity during the year. Further, the AO alleged that the assets side of the balance sheet does not show any amount or asset in the form of work in progress to indicate or to prove the assessee's engagement in business. Accordingly, the AO came to the conclusion that the business loss claimed by the assessee, which is chargeable to tax has escaped assessment and the assessee has failed to disclose true and full particulars of income for the year under consideration. 12. Before proceeding further, it is relevant to analyse the provisions of 1st proviso to section 147 of the Act, as it stood prior to its substitution by Finance Act 2021, which reads as under: "Provided that where an assessment under sub-section (3) of section 143 or this section has been made fo....
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.... Form 3CB, etc. The assessee vide its submission dated 10/10/2014 complied with the aforesaid notice and furnished a copy of the audited financial statement, and return of income with annexures. Vide another submission dated 16/02/2015, the assessee, inter-alia, provided a copy of the computation of income, detail of bank account, details of unsecured loans, details of loans and advances, etc. 15. Thus, from the above, it is evident that all the details sought by the AO were provided by the assessee during the course of scrutiny assessment proceedings, and the said details were accepted by the AO under section 143(3) of the Act. Further, from the perusal of reasons recorded for reopening the assessment, it is evident that the only basis available with the AO for initiating the impugned reassessment proceedings was the perusal of the profit and loss account and balance sheet i.e. the information which was already considered and examined during the course of original scrutiny assessment proceedings. Further, the reference to search action, in the reasons recorded, carried out in the case of Indiabulls Group is also of no avail to the Revenue, since no material found during such sear....