2026 (5) TMI 98

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....(3) of the Act pertaining to Assessment Year 2011- 12. 2. Brief facts of the case are that the assessee has filed its return of income on 30.09.2011 declaring total income of INR 90,70,150/-. The assessment order was passed u/s 143(3) of the Act dated 28.03.2014 at INR 91,53,471/-. Thereafte, based on the information received that he assessee has claimed bad debts of INR 2,99,82,398/- out of which a sum of INR 2,91,40,265/- was with respect to outstanding receivable due to Ulysses Navigation, S.A., a foreign company and the assessee has not fulfilled all the conditions under FEMA for writing off such outstanding, therefore, re-assessment proceedings u/s 147 were initiated by way of issue of notice u/s 148 of the Act on 29.03.2018. The AO....

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....0,265/- claimed as bad debts written off, ignoring that the same was written off in the books and hence allowable under section 36(1)(vii) read with section 36(2) of the Income-tax Act, 1961. 5. That the learned CIT(A) erred in holding that non-submission of RBI permissions or FEMA compliance renders the bad debts inadmissible, without appreciating that such conditions are not mandated under the Income Tax Act. 6. That the learned CIT(A) erred in ignoring binding precedent of the Hon'ble Supreme Court in TRF Ltd. v. CIT [(2010) 323 ITR 397 (SC)] and CBDT Circular No. 12/2016, which clarify that writing off the debt in books is sufficient for deduction under section 36(1)(vii). 7. That the order of the learned CIT(....

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....herefore prayed that without making any specific charge of failure on the part of the assessee to disclose fully and truly material facts necessary for the assessment, the reassessment proceedings initiated u/s 147 of the act after the expiry of four years from the end of the relevant assessment year is mere change of opinion. In this regard, Ld.AR placed reliance on the judgements of Hon'ble Supreme Court and Hon'ble High Court in following cases (i) CIT vs Kelvinator of India Ltd. [2010] 320 ITR 561 (SC); (ii) ITO vs Techspan India Pvt.ltd. [2018] 404 ITR 10 (SC); (iii) S Chand & Co. Ltd. vs ACIT 2017 (9) TMI 238; and (iv) DIT vs Rolls Royce Industrial Power India Ltd. [2017] 394 ITR 547 (Delhi HC). ....

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.... or on the date of passing of the order thus, they could not be examined by the AO. However, this cannot be the reason for reopening as the Ao has other options such as revision u/s 263 of the Act which has not been done. 9. As per section 147 of the Act, before reopening the assessment, the first and foremost step is that AO should examine the information in his possession which he is going to rely on, for formation of his belief that income of the assessee has escaped assessment. The information should be specific and clear and have live nexus with the material available. Further, the information should be available at the time of reopening of the assessment and not subsequent to the re-opening of the assessment by issuing a notice u/s....

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....o reopen the assessment. Once the assessment was completed u/s 143(3) of the Act, for reopening such assessment proviso to section 147 of I.T. Act applies as the notice was issued after four years from the end of the relevant assessment year. AS per the said proviso, unless the income has escaped assessment by reason of failure on the part of assessee to disclose fully and truly all material facts necessary for assessment. While recording the reasons, the AO should observe that assessee has failed to disclose full and true material facts. In the present case, entire premise of re-assessment is based on verification of the material already available on record and not even an iota of any new tangible material which the assessee had failed to ....