2023 (8) TMI 438

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ceed to decide the appeal on merit because the delay has already been explained and condoned. 3. In the first ground of appeal, the assessee has challenged re-opening of assessment by issuance of a notice under section 148 of the Income Tax Act. 4. Brief facts as emerging out from the assessment order would reveal that the assessee has filed its return of income on 02.07.2007 in compliance to a notice issued under section 142(1) dated 27.03.2007. Subsequently in order to scrutinize the return, a notice under section 143(2) was issued and served upon the assessee. After verification of the record, ld. Assessing officer has passed the assessment order under section 143(3) on 31.12.2008 at a loss of Rs. 1,73,54,450/-. 5. On account of some internal audit objection, the assessment of the assessee has been reopened by issuance of a notice under section 148 on 26.03.2012. The ld. Assessing Officer did not provide the copies of the reasons to the assessee inspite of prayer of the assessee. Ultimately at the end of the intervention of the Tribunal, copies of such reasons has been supplied not only to the assessee but placed on record. The reasons read as under:- "The assessee has file....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....oval to issue notice U/s 148 of the I T Act is sent to Ld. CIT, Asansol through proper channel". 6. The ld. Counsel for the assessee while impugning the reasons filed a brief note, which reads as under:- "(1) That reasons for re-opening of the case under section 147 was totally baseless. (2) That in the original assessment order passed by Income Tax Officer Ward 3(2) Purulia under section 143(3) did not mention that the loss assessed will be carried forward. A copy of the order of assessment, the assessee also did not claim carry forward of loss in the I. T. Return for the Assessment year 2007-08 and only shown the loss for assessment year 2007-08. A copy of the return is attached. (3) That the ground that If there is loss, no provision for N.P.A could be made is without any basis. The loss shown by the assessee was after taking the provision for bad debts. (4) That co-op. banks are non-scheduled bank and is entitled to make provision for bad debts under proviso to section 36 (VIIa). (5) That in support that a co-op. bank is non schedule bank the assessee is attaching herewith the decision of ITAT A Bench Chennai is the case o f Vellore District Central Commissioner of C....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Commissioner will not do and assessments can only be re-open after four years only if the escapement of income is happened due to failure on the part of the assessee and can be opened after 4 years of original assessment was completed under section 143(3) to 147. No such fault was pointed put by A.C.I.T. (13) That the above view was well supported by the decision of Allahabad High Court ;in the case of Girdhar Gopal Gualti vs Union of India (2004 Taxman 312. So the re-opening of the case should be set aside". 7. The main emphasize of the ld. Counsel for the assessee was that a scrutiny assessment was passed on 31.12.2008. The notice under section 148 has been issued after expiry of four years from the end of the relevant assessment year. Thus according to the ld. Counsel for the assessee, the assessment could only be re-opened, if Revenue is able to lay its hand on an information which can demonstrate that the assessee failed to disclose all material facts fully and truly while income was scrutinized under section 143(3) of the Income Tax Act. In other words, on account of failure of the assessee, income of the assessee has escaped assessment. The ld. Counsel for the assessee th....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ion of belief demonstrating the escapement of income from taxation. The first proviso appended to this section puts an embargo upon the powers of the ld. Assessing Officer. The interdiction provided in this proviso would contemplate that if an assessment order under sub-section 3 of section 143(3) or under section 147 has been made for the relevant assessment year, then no action shall be taken under this section after 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 return under section 139 or in response to a notice under section 142(1) or 148 or to disclose fully and truly all material facts necessary for assessment for that assessment year. In other words, if an assessee fails to disclose all material facts fully and truly only, then the assessment could be reopened by issuance of a notice under section 148 after the expiry of four years where earlier assessment was made either under section 143(3) or under section 147. In the present case, the earlier assessment has been framed under section 143(3) on 31.12.2008. The ....