Itxa/1164/2016 Of The Pr. Commissioner Of Income Tax-7 v. M/S. National Stock Exchange Of India Ltd

Priya Soparkar IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1164 OF 2016 Commissioner of Income-Tax-7 … Appellant V/s. M/s National Stock Exchange of India Ltd. … Respondent --- Mr.Suresh Kumar for the Appellant.Mr.Jehangir Mistri, Senior counsel with Mr.Atul Jasani for theRespondent. --- CORAM : AKIL KURESHI AND M.S.SANKLECHA, JJ. DATE : FEBRUARY 18, 2019. P.C.:- 1.Revenue has filed this appeal against the judgment of theIncome Tax Appellate Tribunal ("the Tribunal" for short). 2.Following question is presented for our consideration:- “Whether on the facts and in the circumstances ofthe case and in law, the ITAT was right in holdingthat the reopening is invalid without appreciatingthe fact that 'failure' was attributable to the assesseesince it claimed gross interest on tax free bonds asexempt without disclosing the expenditure incurred Priya Soparkar thereon? 3. The assessment year under consideration is 1996-97. TheAssessing Officer after initially framing scrutiny assessment underSection 143(3) of the Income Tax Act, 1961 ("the Act" for short)issued a notice of reopening of assessment beyond a period offour years from the end of relevant assessment year. The Tribunalby the impugned judgment held that the notice of reassessmentwas invalid primarily on the ground that there was no failure onthe part of the assesseee to disclose truly and fully all necessaryfacts necessary for assessment. The reasons recorded by theAssessing Officer are as under. 4.The reasons would show that the assessee had earnedgross interest on tax free bonds. The interest income wasexcluded from the taxable income on gross basis. However,according to the Assessing Officer, the exempt income had to becomputed after allocating expenses incurred on earning exemptreceipts which the assessee had not done in the present case.Whatever be the validity of the Assessing Officer's contention in Priya Soparkar this respect, it cannot be stated, in fact not even so stated by the Assessing Officer, that there was failure on the part of theassessee, but disclose truly and fully all material facts necessaryfor assessment. In that view of the material, the Tribunal in ouropinion committed no error. 5. Income Tax appeal is dismissed. (M.S.SANKLECHA,J.) (AKIL KURESHI,J.)….