Ita/853/2011 Of Commissioner Of Income Tax v. Dcm Ltd

o/o L5.O7.zOLl Present: Mr. Kamal Sawhney, Sr. Standing Counsel for theRevenue +cM APPL, L2445/2Ot 1 Exemption allowed subject to [just ]exception. Application stands disposed of. rTA 853/201 1 Regular assessment was completed under Section 143 (3) ofthe lncome-Tax Act on 26th March, 2004. However, after a lapse ofmore than four years, notice under Section I4B of the Act wasissued seeking reopening of the assessment which was objected toby the assessee. The Assessing Officer, however, rejected theobjections of the assessee and went ahead with the assessment. Asper the Assessing Officer, the reasons for reopening the assessmentwas that the assessee had not furnished computation of book profitunder Section 115JA of the Act either in the original return furnishedon 30th November, 2000 or in the revised return furnished on 27thMarch, 2002. According to the Assessing Officer even in the returnfiled in response to notice under Section 1'48 of the Act, such detailswere not furnished. He accordingly made addition on this groundunder the provisions of Section 115JA of the Act thereby the claimsetoff , of brought forward loss or unabsorbed depreciation would._.!u <l. Vfg€r! V.ei.!,.be restricted to t 12.54 crores onlv as ' aqainst claim of t 21.35Da'tc+rl AR(c-rg s. riss: Signature Not Verified The assessee preferred assessee preferred preferred appeal crores originally granted.The assessee preferred assessee preferred preferred appealthereagainst challenging the reassessment on the [ground ]thatnotice under Section 148 was invalid and there was no case forreopening of the assessment, The reassessment order was alsochallenged on merits. The CIT (A) rejected the contention of theassessee insofar as issue of reopening of the assessment wasconcerned. However, the appeal on merits was allowed by the CIT(A) and the order of the reassessment was upset restoring theoriginal order on this count. In these circumstances, both the Revenue as well as the assessee filed the appeals The Revenue challenged the order of theCIT (A) on merits restricting the depreciation. The assesseeCIT (A) on merits restricting the depreciation. The assesseechallenged on the issue of reopening of the reassessment. Theappeal of the assessee has been allowed by the ITAT and for thisreasons the Tribunal did not go into the merits of the case,appeal of the assessee has been allowed by the ITAT and for thisreasons the Tribunal did not go into the merits of the case, From the order of the Tribunal, we find that three reasonsareassigned by it quashing the notice under Section L48 of theActwhich are as under:- (i) Though the notice under section 148 of the Actwas issued after expiry of four years from the endwas issued after expiry of four years from the end" of the relevant previous year, in the 'Reasons toBelieve' given by the Assessing Officer, there wasnot even a whisper that the assessee had notdisclosed fully and truly all material facts relatingBelieve' given by the Assessing Officer, there wasnot even a whisper that the assessee had notdisclosed fully and truly all material facts relating 'a a to the assessment and there was no allegations inthe recorded reasons about such failure.the recorded reasons about such failure. In the 'Reasons to Believe' the Assessing officerhad stated that the information was receivedfrom the Commissioner and only for that reasonthe reassessment was opened with application ofmind independently by the Assessing Officer onthis aspect. He, thus, followed the directions ofthe Additional Commissioner of Income Taxmechanically.had stated that the information was receivedfrom the Commissioner and only for that reasonthe reassessment was opened with application ofmind independently by the Assessing Officer onthis aspect. He, thus, followed the directions ofthe Additional Commissioner of Income Taxmechanically. (ii) 'a a to the assessment and there was no allegations inthe recorded reasons about such failure.the recorded reasons about such failure. In the 'Reasons to Believe' the Assessing officerhad stated that the information was receivedfrom the Commissioner and only for that reasonthe reassessment was opened with application ofmind independently by the Assessing Officer onthis aspect. He, thus, followed the directions ofthe Additional Commissioner of Income Taxmechanically.had stated that the information was receivedfrom the Commissioner and only for that reasonthe reassessment was opened with application ofmind independently by the Assessing Officer onthis aspect. He, thus, followed the directions ofthe Additional Commissioner of Income Taxmechanically. (ii) In the reasons it was not even stated that it hadnot been alleged that the income had escapedassessment on the part of the assessee todisclose all material facts necessary for theassessment for that year. Furthermore, theTribunal found that the material particulars weresupplied by the assessee when the originalassessment took place and the Assessing Officerhad dealt with the assessee while grantingdepreciation. Since the notice was issued after theexpiry of four years, sanction as required underSection 151 which is a pre condition was notobtained.not been alleged that the income had escapedassessment on the part of the assessee todisclose all material facts necessary for theassessment for that year. Furthermore, theTribunal found that the material particulars weresupplied by the assessee when the originalassessment took place and the Assessing Officerhad dealt with the assessee while grantingdepreciation. Since the notice was issued after theexpiry of four years, sanction as required underSection 151 which is a pre condition was notobtained. (iii) Challenging the aforesaid order the only argument pressed bythe Revenue is that letter was received from the Commissionerasking the Assessing Officer to reopen the assessment, it should betreated as requisite approvalas in such circumstances, seekingformal approval under Section151 of the Act was a mere formality. -? e We find that in this behalf the Tribunal has rightly observedthat the question of approval arises only after the reasons havebeen recorded by the Assessing Officer and in the absence ofrecording reasons, there was no question of [pre ]existing approval.When there is a specific provision it has to be followed meticulously.Admittedly, there was no such approval and earlier letter of theCommissioner could not be treated as approval. That apart, since there is no challenge to the order on other grounds on which notice under Section 148 of the Act was quashedby the Tribunal, we find that even if this ground did not succeed stillthe outcome would remain the same. We find that no substantial question of law arises. This appeal is accordingly dismissed. WAlK. SIKRt, J. _ffi,M.L.MEHTA, J. July [L5, 2011]skb