AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 802
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....Services Tax within the due date of filing of return of income. (2) Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was correct in holding .that the reassessment was merely based on a "change of opinion" when in fact the assessment was reopened due to the failure of the assessee to pay VAT and Service Tax within the prescribed time limit, thereby attracting the provisions of section 43B of the Act. (3) Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in ignoring the fact that the case was reopened under section 147 beyond four years as the assessee failed to disclose fully and truly all material facts necessary for its assessment for the relevant assessment year. (4) Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the provisions of section 43B are mandatory in nature and any unpaid statutory liability is to be disallowed if not paid within the prescribed time limit, irrespective of whether it was debited in the profit and loss account or not. This position is supported by the decision of the Hon'ble Supreme C....
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....tion 43B are clearly attracts on search transaction, however, as the assessee had not paid the amount of payable taxes as at the date of end of year regarding VAT and service tax before filing of ITR. Hence, according to provisions of Section 43B such amount is liable to be disallowed. Accordingly, an amount of Rs. 4,00,18,841/- (7,63,772+3,92,55,069) was added to the total income of the assessee and the assessment was completed enhancing the assessed income of the assessee at Rs. 4,17,77,681/-. 5. Being aggrieved with the aforesaid addition by the Ld. AO, assessee preferred an appeal before the First Appellate Authority, wherein the Ld. CIT(A) had deliberated on the issues and after placing reliance on the judgment of Hon'ble Apex Court had allowed the appeal of assessee treading the reopening assessment in the case of assessee as the assessment passed on change of opinion and that there was no satisfaction drawn by the Ld. AO regarding failure on the part of the assessee to disclose fully all material facts, thus, the same covered by Proviso to section 147. The relevant findings of the Ld. CIT(A) are extracted hereunder for the sake of completeness: 5. Decision: I hav....
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....at the time of original assessment. It is settled law that such view is not permitted within the scope of Income Tax laws. The Assessing Officer prima facie has to form "reason to believe" that income has escaped assessment before passing re-assessment order u/s. 147 of the Act and satisfaction to that extent has to be recorded. There cannot be any re-assessment on the ground of verification. The reasons recorded by the Assessing Officer are nothing but stating facts which are already in front of the Assessing Officer. There is no specific new material fact brought on record to suggest that income has escaped assessment. The appellant also furnished the copy of questionnaire issued by A.O and the reply submitted during the original assessment with its submission for reference. 5.3 On perusal of the submission of the appellant it is seen that the case of the appellant was reopened on the ground that the appellant had not paid VAT and service tax before due date. During the original assessment proceedings, the A.O vide questionnaire dated-27.09.2013 had specifically asked query regarding unpaid liabilities of Entry Tax, Professional tax, Service Tax, Income Tax TDS and VAT s....
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....ttery Works Co Ltd reported in 106 ITR 1 has held as follows:- At the same time, we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that state issue should not be reactivated beyond a particular stage and that lapse of time must induce repose in an set at rest judicial and quasi- judicial controversies as it must in other spheres of human activity. So far as the income tax assessment orders are concerned, they cannot be reopened on the scope of income escaping assessment under section 147 of the Act of 1961 after the expiry of 4 years from the end of the assessment year unless there b$ omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. As already mentioned, this cannot be said in the present case. The appeal is consequently allowed." Respectfully following the above decision of the apex court it is observed that the reopening of the assessment in this case is based on change of opinion and further the AO has also not drawn his satisfaction regarding the failure on the part of the assessee to disclose fully and truly all material....
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....unsel for the Income Tax Department / Revenue, would submit that the appellant did not claim the said amount of 62,32,262/- in his profit and loss account as expenditure and the case is covered by the decision rendered by this Court in M/s Ganapati Motors's case (supra). 8. We have heard learned counsel for the parties and considered their rival submissions made herein-above and also went through the record with utmost circumspection. 9. In order to consider the plea raised at the Bar, it would be appropriate to notice Section 43B(a) of the IT Act, which states as under: "43B. Certain deductions to be only on actual payment. -Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of- (a) any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force, or xxx xxx xxx" 10. In this regard, decision of this Court in M/s Ganapati Motors's case (supra) would be more relevant in which the issue before the Court was, whether Section 43B of the IT Act is attracted even when the assessee does not c....