Madhya Pradesh H.C : the adjustment for depreciation is required to be made on the basis of Schedule XIV to the Companies Act ?

High Court Of Madhya Pradesh

Hind Syntex Ltd. Vs. CIT

Assessment Year : 1988-89

Section : 147

Dipak Misra And R. K. Gupta, JJ.

IT Reference No. 6 Of 1999

November 30, 2009

JUDGMENT

Dipak Misra, J. — This is a reference under section 256(1) of the Income-tax Act, 1961 (for brevity “the Act”) for opinion of this court in respect of the following questions of law :

“(i)Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that the reopening of assessment under section 147(a) was valid ?

(ii)Whether on the facts and in the circumstances of the case the Tribunal was right in holding that even when the balance-sheet is prepared according to the Companies Act the adjustment for depreciation is required to be made on the basis of subsequent events of introducing Schedule XIV to the Companies Act ?

(iii)Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that the assessee should have provided depreciation as per Schedule XIV to the Companies Act by the Companies (Amendment) Bill, 1988 on May 24, 1988, with retrospective effect from April 2, 1987 prior to the end of the accounting year of the assessee, i.e., April 30, 1987, when the depreciation of assets is required to be ascertained even though the books of account of the assessee were closed and the accounts were passed, in AGM ?”

2. The facts which are essential to be stated are that the assessee is a public limited company engaged in the business of manufacturing of synthetic blended yarn. For the assessment year 1988-89 relevant to the previous year ending on April 30, 1987, the assessee submitted its return on June 21, 1988, declaring its income at Rs. 35,77,693 which was later on revised by filing a revised return on March 6, 1989, declaring the income therein at Rs.25,42,627 on March 30, 1989. The assessee put forth a stand that the provisions contained in section 115J of the Act were not applicable to the case of the assessee. The income was assessed under section 143(1)(a) of the Act at Rs. 25,42,627 on March 30, 1989. Later on, the Assessing Officer passed an order of rectification under section 154 of the Act and made an addition of Rs. 10,35,066.

3. Being dissatisfied with the order passed by the Assessing Officer, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals) but the appellate authority did not accept the contentions raised in the appeal and, accordingly, it ensued in the dismissal of the appeal.

4. Being aggrieved by the order of the first appellate authority, the assessee approached the Income-tax Appellate Tribunal (for short “the Tribunal”) in I.T.A. No. 565/Ind./91. Before the Tribunal, it was contended by the assessee that it had been providing depreciation on straight-line method till the previous year ending on April 30, 1986 relevant to the assessment year 1987-88. It changed the method of providing depreciation from the assessment year 1988-89 from the straight-line method to the written down value (WDV) method and, accordingly, the depreciation was charged at Rs. 2,60,84,138. In the subsequent assessment year, i.e., 1989-90, the assessee had changed the method of providing depreciation consequent upon the introduction of Schedule XIV to the Companies (Amendment) Act, 1988 and filed the return of income before the Revenue authorities. During the course of assessment for the year 1989-90, the Assessing Officer noticed from the annual report in which the assessee had notified at item No. 6 in the notes of account that the company has provided for depreciation on the written down value method as per rates provided under the Income-tax Rules, 1962, up to April 1, 1987. Consequent to the introduction of Schedule XIV to the Companies (Amendment) Act, 1988, the company provided for depreciation as per the rates specified therein for the period April 2, 1987 to April 30, 1987, and in view of the above change the company had written back the excess provision of depreciation amounting to Rs. 12,86,486. Relying upon the information with regard to the earlier assessment year, the Assessing Officer reopened the assessment for the assessment year 1988-89 after forming an opinion that the income chargeable to tax had escaped assessment and that it would have an impact on the working of income under section 115J of the Act. The Assessing Officer issued notice under section 148 of the Act and reassessment was framed under section 143(3) read with section 147 of the Act and he made an addition of Rs. 95,17,841 as excess depreciation charged in respect of the assessment year. The Tribunal, after recording the facts, came to hold that there was sufficient material, on record to have reasonable belief that the assessee had not disclosed fully or truly the material facts necessary for the year.

5. The issue relating to Rs. 95,17,841 was examined by the Tribunal in the light of relevant provision of section 115J of the Act and the provisions of the Companies Act and it finally concurred with the view of the first appellate authority that the assessee had charged excess depreciation for the relevant assessment year and the Revenue authorities were justified in disallowing the excess of charge of depreciation. The Tribunal, as is manifest from the order, dealt with both the appeals in a composite manner. The Tribunal, while dealing with the reopening of the assessment under section 147(a) of the Act, in paragraph 11 expressed the view as follows :

“11. In the instant case it is not a case of the assessee that he has not charged excess depreciation in the relevant assessment year. Once it is an admitted fact that the excess depreciation was provided by the assessee in the relevant assessment year which has affected the computation of income under section 115J of the Act, we have to see what were the circumstances which prevented the assessee from disclosing the reasons for not withdrawing the excess depreciation charged in its return of income filed after the introduction of Schedule XIV of the Companies Act, but unfortunately we do not find any justification on record from which it can be deduced that the non-disclosure of this fact was a bona fide mistake of the assessee. In these circumstances, we find that there was sufficient material for the Assessing Officer to have a reasonable belief that the assessee has failed to disclose fully and truly material facts necessary for assessment for that year and the income chargeable to tax has escaped assessment for that year. We, therefore, subscribe the view of the Commissioner of Income-tax (Appeals) on this point.”

6. While dealing with the issue of charge of excess depreciation, the Tribunal, while concurring with the view of the appellate authority and after referring to sections 205(1)(b) and 350 of the Companies Act, came to hold as follows :

“15. From a careful perusal of the aforesaid sections it has become abundantly clear that the depreciation shall be ascertained at the end of the accounting/financial year in accordance with the relevant provisions of the Act which are in force at the relevant point of time. It is obvious from record that the accounting year of the assessee relevant for the assessment year 1988-89 ended on April 30, 1987 and the original return of income was filed on June 21, 1988, which was later on revised on March 6, 1989. The Presidential assent was given to the Companies (Amendment) Bill, 1988 on May 24, 1988, whereby Schedule XIV was introduced to the Companies Act with retrospective effect from April 2, 1987. It means at the end of the accounting year of the assessee i.e., April 30, 1987, when the depreciation of assets is required to be ascertained, Schedule X1V was applicable and the assessee was supposed to provide depreciation as per Schedule XIV to the Companies Act. We do not find anywhere in the Act which suggests that the assessee can provide different rates for depreciation on the same asset in one accounting year. Since the depreciation is to be ascertained at the end of the accounting year, we are of the view that the rates provided by the relevant law at that time are to be applicable for its ascertainment. In the instant case, on April 30, 1987, when the accounting year was ended, the depreciation should have been ascertained at the rates provided in Schedule XIV to the Companies Act which was applicable at the relevant point of time. We may agree with the submissions of the assessee that Schedule XIV was introduced after the closure of the books of account and its adoption by the AGM and its reopening was not permissible or advisable by the rules or guidelines laid down by the Institute of Chartered Accountants but in that eventuality the assessee could have notified the reasons of non-withdrawal of excess charged depreciation in its return of income filed after the date of introduction of Schedule XIV to the Companies Act. Moreover, in the succeeding accounting year the assessee did not write back the entire excess charged depreciation in its books of account and has only written back the excess charged depreciation for the period April 2, 1987 to April 30, 1987 on the ground that Schedule XIV was effective from April 2, 1987. We are unable to agree with this contention of the assessee.”

7. We have heard Mr. H.S. Shrivastava, learned senior counsel along with Mr. Abhijeet Shrivastava, learned counsel for the assessee, and Mr. Sanjay Lal, learned counsel for the Revenue.

8. In the course of hearing, Mr. H.S. Shrivastava, learned senior counsel, submitted that the questions that have been framed by the Tribunal may be dealt with in a different seriatim. It is urged by him that question No. 2 should be dealt with first, thereafter, question No. 3 and lastly, the question No. 1.

9. Mr. Sanjay Lal, learned counsel for the Revenue, did not oppose the said prayer. Hence, we proceed accordingly.

10. As far as question No. 2 is concerned, it relates to the aspect whether the Tribunal is justified in holding that even when the balance-sheet is prepared according to the Companies Act, the adjustment for depreciation is required to be made on the basis of subsequent events introducing Schedule XIV to the Companies Act. Section 205 of the Companies Act was amended with effect from May 24, 1988 with retrospective effect from April 2, 1987. Earlier, as has been submitted by Mr. Shrivastava, the depreciation was chargeable as per the written down value method and as per the Companies Act, the accounts were to be prepared as per Schedule VI which did not provide as, to how the depreciation is to be worked out. The rates of depreciation under the Act were substantially revised from 1988-89 and, therefore, the amendment under section 205 was proposed. The amendment was brought to provide that in future, depreciation shall be calculated in accordance with the rates specified in Schedule XIV to the Act. It is submitted by Mr. Shrivastava, learned senior counsel, that if the purpose of the amendment is appositely appreciated, there has been de-linking of the depreciation under the Companies Act from that under the Income-tax Act.

11. Section 350 of the Act prior to the amendment provided for depreciation as per the Income-tax Act on the written down value method. The working of depreciation as per the Companies (Amendment) Act as per Schedule XIV came into existence from May 24, 1988. Thus, the depreciation on the written down value method adopted by the assessee was in accordance with law prior to the amendment. As far as the assessment year is concerned, the year ended on April 30, 1987, the accounts were audited by the chartered accountant on June 30, 1987, and the accounts were also passed in the annual general meeting prior to passing of the Amendment Act on May 24, 1988. It is urged by Mr. Shrivastava that by the time the Act was passed on May 16, 1988, the accounts of the company were finalised, audited on June 30, 1987 and passed in the annual general meeting as the factual matrix would show. In this context, he has invited our attention to section 115J of the Act. The said provision reads as under :

“115J. (1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee being a company, the total income, as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 1988 (hereinafter in this section referred to as the relevant previous year) is less than thirty per cent of its book profit, the total income of such assessee chargeable to tax for the relevant previous year shall be deemed to be an amount equal to thirty per cent of such book profit.

Explanation.—For the purposes of this section ‘book profit’ means the net profit as shown in the profit and loss account for the relevant previous year prepared in accordance with the provisions of Parts II and III of the Sixth Schedule to the Companies Act, 1956 (1 of 1956) as increased by-

(a)the amount of income-tax paid or payable, and the provision therefor ; or

(b)the amounts carried, to any reserves, by whatever name called; or

(c)the amount or amounts set aside to provisions made for meeting liabilities other than ascertained liabilities ; or

(d)the amount by way of provision for losses of subsidiary companies ; or

(e)the amount or amounts of dividends paid or proposed ; or

(f)the amount or amounts of expenditure relatable to any income to which any of the provisions of Chapter III applies ;

If any such amount is debited to the profit and loss account, and as reduced by-

(i)the amount withdrawn from reserves or provisions, if any such amount is credited to the profit and loss account ; or

(ii)the amount of income to which any of the provisions of Chapter III applies, if any such amount is credited, to the profit and loss account ; or

(iii)the amount of the loss or the amount of depreciation which would be required to be set off against the profit of the relevant previous year as if the provisions of clause (B) of the first proviso to sub-section (1) of section 205 of the Companies Act, 1956 (1 of 1956) are applicable.”

12. On a perusal of the aforesaid provision, it is quite clear that the said provision refers to accounts as per Schedule VI and not Schedule XIV introduced by the Companies (Amendment) Act, 1988 dated May 24, 1988, with retrospective effect from April 2, 1987.

13. In this context, we may refer with profit to the decision rendered in Apollo Tyres Ltd. v. CIT [2002] 255 ITR 273/ 122 Taxman 562 wherein the Apex Court, after referring to section 115J of the Act and the object of the said provision and the speech of the Finance Minister, stated thus :

“The above speech shows that the income-tax authorities were unable to bring certain companies within the net of income-tax because these companies were adjusting their accounts in such a manner as to attract no tax or very little tax. It is with a view to bring such of these companies within the tax net that section 115J was introduced in the Income-tax Act with a deeming provision which makes the company liable to pay tax on at least 30 per cent of its book profits as shown in its own account. For the said purpose, section 115J makes the income reflected in the company’s books of account the deemed income for the purpose of assessing the tax. If we examine the said provision in the above background, we notice that the use of the words ‘in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act’ was made for the limited purpose of empowering the assessing authority to rely upon the authentic statement of accounts of the company. While so looking into the accounts of the company, an Assessing Officer under the Income-tax Act has to accept the authenticity of the accounts with reference to the provisions of the Companies Act which obligates the company to maintain its accounts in a manner provided by the Companies Act and the same to be scrutinised and certified by the statutory auditors and will have to be approved by the company in its general meeting and thereafter to be filed before the Registrar of Companies who has a statutory obligation also to examine and satisfy that the accounts of the company are maintained in accordance with the requirements of the Companies Act. In spite of all these procedures contemplated under the provisions of the Companies Act, we find it difficult to accept the argument of the Revenue that it is still open to the Assessing Officer to rescrutinise this account and satisfy himself that these accounts have been maintained in accordance with the provisions of the Companies Act. In our opinion, reliance placed by the Revenue on sub-section (1A) of section 115J of the Income-tax Act in support of the above contention is misplaced. Sub-section (1A) of section 115J does not empower the Assessing Officer to embark upon a fresh inquiry in regard to the entries made in the books of account of the company. The said sub-section, as a matter of fact, mandates the company to maintain its accounts in accordance with the requirements of the Companies Act which mandate, according to us, is bodily lifted from the Companies Act into the Income-tax Act for the limited purpose of making the said account so maintained as a basis for computing the company’s income for levy of income-tax. Beyond that, we do not think that the said sub-section empowers the authority under the Income-tax Act to probe into the accounts accepted by the authorities under the Companies Act. If the statute mandates that income prepared in accordance with the Companies Act shall be deemed income for the purpose of section 115J of the Act, then it should be that income which is acceptable to the authorities under the Companies Act. There cannot be two incomes one for the purpose of the Companies Act and another for the purpose of income-tax both maintained under the same Act. If the Legislature intended the Assessing Officer to reassess the company’s income, then it would have stated in section 115J that ‘income of the company as accepted by the Assessing Officer’. In the absence of the same and on the language of section 115J, it will have to be held that view taken by the Tribunal is correct and the High Court has erred in reversing the said view of the Tribunal.

Therefore, we are of the opinion, the Assessing Officer while computing the income under section 115J has only the power of examining whether the books of account are certified by the authorities under the Companies Act as having been properly maintained in accordance with the Companies Act. The Assessing Officer thereafter has the limited power of making increases and reductions as provided for in the Explanation to the said section. To put it differently, the Assessing Officer does not have the jurisdiction to go behind the net profit shown in the profit and loss account except to the extent provided in the Explanation to section 115J.” (p. 279)

14. In CIT v. HCL Comnet Systems & Services Ltd. [2008] 305 ITR 409 / 174 Taxman 118 (SC) their Lordships referring to the decision rendered in Apollo Tyres Ltd.’s case (supra) have held as follows :

“From the above, it is evident that the Assessing Officer has to accept the authenticity of the accounts maintained in accordance with the provisions of Part II and Part III of Schedule VI to the Companies Act, which are certified by the auditors and passed by the company in the general meeting. The Assessing Officer has only the power of examining whether the books of account are duly certified by the authorities under the Companies Act and whether such books have been properly maintained in accordance with the Companies Act. The Assessing Officer does not have the jurisdiction to go beyond the net profit shown in the profit and loss account except to the extent provided in the Explanation. Thereafter, the Assessing Officer has to make adjustment permissible under the Explanation given in section 115JA of the 1961 Act. It may be noted that the adjustments required to be made to the net profit disclosed in the profit and loss account for the purposes of section 349 of the Companies Act are quite different from the adjustment required to be made under the Explanation to section 115JA of the 1961 Act. For the purposes of section 115JA, the Assessing Officer can increase the net profit determined as per the profit and loss account prepared as per Parts II and III of Schedule VI to the Companies Act only to the extent permissible under the Explanation thereto.” (p. 413)

15. From the aforesaid enunciation of law, it is quite luculent that the Assessing Officer does not have jurisdiction to go behind the net profit shown in the profit and loss account except to the extent provided in the Explanation to section 115J. Thus, contends Mr. Shrivastava, learned senior counsel, that the audited accounts deserve to be accepted and the Tribunal fell into error in holding that even when the balance-sheet is prepared according to the Companies Act, the adjustment for depreciation was required to be made on the basis of subsequent event of introducing Schedule XIV to the Companies Act as the said Schedule is not applicable to the case at hand.

16. As far as question No. 3 is concerned, it pertains to whether the Tribunal was justified in holding that the assessee should have provided depreciation as per Schedule XIV to the Companies Act which was introduced to the Companies Act by the Companies (Amendment) Bill, 1988 and came into force with effect from April 2, 1987, prior to the end of the accounting year of the assessee, i.e. April 30, 1987, when the depreciation of the assets is required to be ascertained, even though the books of account of the assessee were closed and the accounts were passed in the annual general meeting. It is contended by Mr. Shrivastava that the Tribunal was not justified in holding that the assessee should have provided depreciation as per Schedule XIV to the Companies Act. This was something which was not possible to do after passing of the accounts in the annual general meeting. The assessee did not mention in the audit report about changing of depreciation on the written down value method. These facts were disclosed. It was for the Assessing Officer to examine the matter. The depreciation was properly claimed in the first instance. The learned senior counsel has commended us to the decision rendered in Amichand Investment ( P.) Ltd. v. Dy. CIT [2008] 304 ITR 97 (Guj.). In the said decision, the High Court of Gujarat was dealing with the assessment year 1988-89. In that context, the Bench after referring to the decision in Apollo Tyres Ltd.’s case (supra) and interpreting section 115J of the Act held as under :

“10. Section 115J of the Act, more particularly, the Explanation permits increases of the amounts specified in clauses (a) to (f) provided any such amount is debited to the profit and loss account. Clause (a) which relates to the amount of income-lax paid or payable, can be added to the net profit as shown in the profit and loss account provided such an amount of income-tax paid or payable is debited to the profit and loss account. Admittedly, in the present case, there is no debit to the profit and loss account as found by the Tribunal and the debit is to the dividend account. Thus, on a plain reading of the language employed by the statute the exercise undertaken by the Revenue cannot be permitted. It is true, as contended by the learned counsel for the Revenue, that such a situation operates inequitably in the facts of the present case. However, it is not open to the court to add words to the statute merely because in a given case the provision operates to the disadvantage of one side. The court can only interpret the language of the statute without adding to or subtracting any words from the provision. The only exception to this rule of interpretation is where the literal interpretation does not yield any result, or, in other words, results in absurdity. That is not the position in the present case.” (page 104)

17. Eventually, the court expressed the view as follows :

“In the aforesaid fact situation, it is not possible to agree with the Tribunal that the book profit under section 115J of the Act is required to be increased by the tax deducted at source amounting to Rs.5,73,451 when admittedly the amount is not debited to the profit and loss account in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act.” (page 105)

18. The said decision squarely applies to the case at hand and hence, we respectfully agree with the same.

19. Presently to question No. 1. This relates to the facet whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the reopening of assessment under section 147(a) was valid. The audit report dated June 30, 1987 for the year ending on April 30, 1987 reflects that there was full and complete disclosure of the facts in the audit report. The Assessing Officer, while making assessment under section 143(1)(a) of the Act, would have found at a glance that the facts of claiming depreciation on the written down value method had been clearly mentioned at various places in the audited accounts which needed to be gone through while taking proceedings under sections 143(1)(a) and 154 of the Act. As has been indicated earlier, prior to coming into force of the amended provisions of the Companies Act, the accounts had been audited and passed in the annual general meeting.

20. This Court in State Bank of Indore v. ITAT [2006] 282 ITR 409/ 152 Taxman 196 has expressed the views as under :

“6. Clause (a) of section 147 contemplates a situation where there is a failure on the part of the assessee to make a return under section 139 for any assessment year to the Income-tax Officer or to disclose fully and truly all material facts necessary for his assessment for that year and consequent escapement of income chargeable to tax. Clause (b) contemplates the situation where though there has been no omission or failure as contemplated by clause (a), the Income-tax Officer has received some information on the basis whereof he has reason to believe that income chargeable to tax has escaped assessment. In these two situations, the Assessing Officer can assess or reassess such income or recompute the loss or the depreciation allowance subject to adherence to sections 148 to 153. In order to bring the cases of under assessment, assessment at too low a rate and of excessive relief granted under the Act within the mischief of escaped assessment, Explanation 1 appearing under section 147 includes such cases in cases of escaped assessment. Thus, by fiction the cases of under assessment, assessment of income at too low a rate and the cases of income where excessive relief has been granted are treated to be cases of escaped assessment. While learned counsel for the assessee maintains that the cases covered by Explanation 1 in clauses (a), ( b) and (c) would also be treated as cases of escaped assessment where it is necessary for the Department to show that the conditions laid down in clause (a) or (b) of section 147 exist for issuing notice under section 148, learned counsel for the Revenue maintains that Explanation 1 carves out an exception and the condition prescribed for initiating proceedings under clause (a) and clause (b) of section 147 of the Income-tax Act do not apply for making/reopening assessment as per clauses (a), (b ) and (c) of Explanation 1.

7. We are of the view that insofar as the Explanation is concerned, it merely provides for certain contingencies in which there may be doubt as to whether the cases covered by them would amount to escaped assessment. Thus to bring such cases also within the parameters of escaped assessment, the Explanation has been appended. By doing so, it does not appear that the Legislature has intended to do away with the requirement laid down in section 147 for initiating proceedings in accordance therewith. Thus, for all proceedings covered under the Explanation, there should be in existence the conditions either specified in clause (a) or clause (b) as conditions precedent before the proceedings can be initiated against the assessee.” (page 413)

21. Being of this view, this court quashed the proceedings.

22. At this juncture, we may fruitfully refer to the decision rendered in Star Automobiles v. ITO [1989] 178 ITR 613/[1990] 48 Taxman 220 wherein this Court opined thus :

“Though, in the aforesaid order, reference has been made to clause (b) of section 147 of the Act, at the time of hearing, it was conceded that reassessment would be under section 147(a) of the Act. It is well-settled that two conditions precedent are required to be fulfilled before the Income-tax Officer can exercise jurisdiction under clause (a) of section 147 of the Act ; (i) he must have reason to believe that income has escaped assessment ; and (ii) he must have reason to believe that such escapement is by reason of the omission or failure on the part of the assessee to make a return or to disclose fully and truly all material facts necessary for his assessment for the relevant year. It is also well-settled that the expression ‘material facts’ used in clause (a) of section 147 of the Act refers only to primary facts. Now, in the instant case, it is not disputed that the assessee had disclosed the amount of interest accrued on the fixed deposit in the assessment year 1981-82. It is, however, contended that the details relating to the amount of interest were not furnished by the assessee. But the primary facts having been disclosed by the assessee, the Income-tax Officer had no jurisdiction to institute proceedings for reassessment. The impugned notice is without jurisdiction and deserves to be quashed.” (page 614)

23. Yet in another decision rendered in Indian Oil Corpn. v. ITO [1986] 159 ITR 956/ 26 Taxman 336 (SC) their Lordships have expressed thus :

“To confer jurisdiction under clause (a) of section 147 of the Act beyond the period of four years but within a period of eight years from the end of the relevant year under section 148 of the assessment year, two conditions were required to be fulfilled : the first is that the Income-tax Officer must have reason to believe that the income, profits or gains chargeable to tax had been under-assessed or escaped assessment ; the second was that he must have reason to believe that such escapement or underassessment was occasioned by reason, so far as relevant for the present purpose, to disclose fully and truly all material facts necessary for the assessment of that year. Both these conditions are conditions precedent to be satisfied.” (page 967)

24. This court in CIT v. A. Yusuf Ali [IT Reference No. 33 of 1999, decided on September 24, 2007] has also taken the same view.

25. In the case at hand, when the claim of depreciation was disclosed in as many as four notes, namely, directors report, audit report, balance-sheet, statement of accounts, accounting policy, notes of account and the accounts that were passed in the annual general meeting, the Assessing Officer had full information about the same and the extent of allowability was to be examined by him and the question as to quantum and legality of claim was also to be examined. The information said to be contained in the notes in the audit report for the assessment year was not new information as it related only to the quantum of claim of depreciation which had already been made in the audit report for 1988-89. Thus, the order of the Tribunal is not sustainable and hence, the Tribunal was not justified in holding that the reopening of assessment under section 147(a) of the Act was valid.

26. In view of our aforesaid analysis, the reference is answered in the negative in favour of the assessee and against the Revenue.

[Citation : 331 ITR 36]

Leave a Reply

Your email address will not be published. Required fields are marked *