2024 (1) TMI 1233

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....ccompanied by petitioner's computation of income, tax audit report alongwith annextures, etc. Petitioner had debited prior period expenses in its profit and loss account amounting to Rs. 1,25,06,591/- 2. The assessment order under Section 143(3) of the Income Tax Act 1961 (the Act) came to be passed on 20th December 2010. Subsequently, petitioner received a notice dated 28th March 2013 under Section 148 of the Act, proposing to reopen petitioner's assessment because there was reason to believe escapement of income. At petitioner's requests, the reasons to believe was made available and it reads as under: "It has been come to my notice that, on going through the Tax Audit Report (TAR) submitted with return of income, as per Para ....

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....'s contentions are not acceptable since in petitioner's own case for AY-2010-2011, the AO had made additions of prior period expenses of Rs. 7,97,780/- and passed the assessment order under Section 143(3) of the Act on 21st March 2013. Hence, the fresh tangible material has come on record to reopen. 4. Mr. Naniwadekar submitted, at the outset, that the reliance of the officer to reject petitioner's objections on the basis of assessment order for AY-2010-2011 should not be accepted, in as much as, the said assessment order for AY-2010-2011 came to be challenged by petitioner before the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) allowed the prior period expenses and the AO was directed to delete the addition made. Paragraph ....

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....for reopening to disallow prior period of expenses was the assessment order for AY-2010- 2011, that assessment order for AY-2010-2011 having been set aside by CIT(A) in his order dated 18th February 2015 and Revenue having accepted the order, it cannot be said that there was any tangible material to reopen the assessment for AY 2008-2009. Moreover, in ITXA No. 622 of 2010 that was decided by this court on 4th July 2011 (copy of the order at Exhibit C-4 of the petition), one of the question of law raised was whether the ITAT was justified in deleting the disallowance of Rs. 40,47,074/- on account of prior period expenses which did not pertain to the year under consideration when the assessee was following mercantile system of accounting. The....