2024 (3) TMI 40

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....sessing total loss at (-) Rs. 39,74,03,230/-. 2. Subsequently, Petitioner received a notice dated 30th March 2021 under Section 148 of the Act that there was reason to believe Petitioner's income chargeable tax for AY 2013-2014 has escaped assessment. By a communication dated 30th June 2021, Petitioner received the reasons recorded for reopening. 3. The reasons read as under : "Issues as per reasons recorded for reopening The return of income for the A.Y. 2013-14 was e-filed on 29.11.2013 declaring total loss at (-) Rs. 44,72,95,065/-. The assessment was finalized u/s 143(3) of the Act on 23.3.2016 by assessing total loss at (-) Rs. 39,74,03,230/-. 2. As per explanation of section 73 of the Income Tax Act, 1....

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....eason to believe that escaped assessment amounts to or likely to amount to Rs. 1,00,000/- or more for A.Y. 2013-14 within the meaning of explanation 2 below sec. 147 of the I.T. Act. 3. In view of the above, you may submit your response with supporting documents (if any) on the above mentioned issues to undersigned electronically in 'E-proceedings' facility through your account in e-Filling website (www.incometaxindiaefiling.gov.in) at your convenience on or before 15/07/2021." 4. Ms. Hariya submitted, at the outset, that since a notice under Section 148 of the Act dated 30th March 2021 was issued after the expiry of four years from the end of relevant assessment year and assessment under Section 143(3) of the Act has al....

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...., the AO has admitted that it was a subject matter of consideration during the assessment proceedings, but has tried to brush it aside by saying that the subject matter of Section 73 of the Act was simply touched upon, but this issue was neither questioned nor verified by the AO during the course of original assessment proceedings. Ms. Hariya also submitted that the applicability of Section 73 of the Act was the subject of consideration during the assessment proceedings and relied upon copy of a letter dated 29th February 2016 in which in the last paragraph it is recorded as under : "So in the light the above facts and various judicial pronouncements, it is submitted that the assessee has rightly consider the loss in derivatives as....

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....the notice dated 30th March 2021 impugned in this petition has to be quashed and set aside. 8. Mr. Sharma submitted that even though Petitioner's letter dated 29th February 2016 states that Section 73 of the Act was not applicable, there were no notices issued under Section 142(1) of the Act raising any query under Section 73 of the Act and there is no discussion in the assessment order either about this issue. 9. Ms. Hariya responded in rejoinder that if such a query was not raised during the hearings conducted during the assessment proceedings, why would an Assessee refer to the applicability of Section 73 of the Act. Ms. Hariya submitted that almost nine hearings took place before the assessment order dated 23rd March 2016 was pass....

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....ings. Moreover, in the letter dated 29th February 2016, Assessee has elaborately discussed as to why Section 73 of the Act is not applicable. In fact, in the said letter even the explanation of Section 73(4) of the Act has also been extracted. Therefore, it is clear that the applicability of Section 73 of the Act was a subject of consideration during the assessment proceedings and as held by Aroni Commercials Limited (supra), once a query is raised during the assessment proceedings and Assessee has replied to it, it follows that the query raised was a subject of consideration of the AO while completing the assessment and it is not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in r....