2024 (9) TMI 1829

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....ionary power u/s. 263 of the Act revising the assessment framed u/s. 147 read with 143(3) of the Act invalidly. 3. Brief facts are that the assessee filed its return of income on 30.09.2016 declaring total income of Rs.5,43,81,450/- which was processed u/s. 143(1) of the Act. Thereafter, the case of the assessee was reopened u/s. 147 of the Act by issuing notice u/s. 148 of the Act on 13.03.2018 after recording reasons u/s. 148(2) in which the following expenses were stated to have not been disallowed by the AO and accordingly, the income has escaped assessment: i) Club service/facility - Rs. 79,12,329/- ii) Penalty - Rs. 8,000/- iii) Contribution to Employee's PF deposited beyond the due date - Rs. 66,26,052/-....

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....r prejudicial to the interest of the revenue. The Ld. AR contended that the assessee filed return of income on 30.09.2016 which was processed u/s. 143(1) and by referring to the order passed u/s. 143(1) dated 24.03.2018 submitted that the returned income has been accepted by the AO, CPC. The Ld. AR submitted that thereafter the reopening u/s. 147 of the Act was done by the AO in order to take cognizance of the four items of expenditure as stated above which were wrongly allowed in the computation of income and has escaped assessment and accordingly, the assessment was framed as stated hereinabove. The Ld. AR argued that the issue of excess allowance of salary to the tune of Rs.138.16 lacs was not the subject matter of reopening nor any such....

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.... under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub-section (2) of section 148. The Ld. CIT, DR submitted that when the AO has the power to make addition on any issue which is virgin to the reason recorded then automatically the assessment so framed by the AO overlooking the said addition and the assessment framed u/s. 147 of the Act is inherently erroneous and prejudicial to the interest of the revenue. Accordingly, the Ld. Pr. CIT prayed before the bench that the plea raised by the Ld. AR of the assessee is devoid of any merit and may be dismissed. 7. We have heard rival submissions and perused the material placed before us. Undisputedly, assessee has filed retur....

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....uring the course of subsequent proceedings. In our opinion, Ld. Pr. CIT could have revised the intimation/order passed u/s. 143(1) dated 24.03.2018. However, the same is barred by limitation as two years from the end of financial year in which the said order was passed have already elapsed on 31.03.2020. The case of the assessee finds support from the decision of Hon'ble Bombay High Court in the case of ICICI Bank (supra) wherein the Hon'ble Court has held as under: "Held, dismissing the appeal, that neither in the first reassessment nor in the second reassessment was any issue raised or decided in respect of the deductions under section 36(1)(vii), (viia) and the foreign exchange rate difference. The order of the Commissioner unde....