Itxa/229/2012 Of Commissioner Of Income Tax-6 v. M/S Century Textiles And Inds. Ltd

sbw *1* IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.229 OF 2012 Commissioner of Income Tax-6 ..Appellant -Versus-M/s. Century Textiles & Ind. Ltd. ..Respondent ........... Mr. Suresh Kumar i/b. Ms. Padma Divakar for the Appellant.Mr. Pankaj R. Toprani and Ms. Krupa Toprani for the Respondent............ CORAM: S.C. DHARMADHIKARI AND B.P. COLABAWALLA, JJ. DATE :- 11[th] June, 2014 P.C.: 1]This is a revenue's appeal challenging the order passed by the Income Tax Appellate Tribunal, Mumbai, in Income Tax Appeal No.3449/Mum/2009. The assessment year in question is 2001-2002. The Tribunal by its order dated 6[th] April, 2011, set aside the order of the Commissioner of Income Tax (Appeals), Mumbai, dated 30[th] March, 2009 passed under section 263 of the Income Tax Act (for short I.T. Act). 2]Mr. Suresh Kumar, the learned counsel appearing on behalf of the appellant submits that this appeal raises a substantial question of law because the Tribunal has overlooked the explanation which has been 1/4 *2* 4.itxa229.12 inserted in section 147 of the Income Tax Act. He relies upon Explanation(3) which has been inserted by the Finance Act No.2 of 2009 with retrospective effect from 1[st] April, 1989. In the submission of Mr. Suresh Kumar, if the Assessing Officer can during the course of the exercise of powers under section 147 assess or re-assess the income in respect of any issue, which has escaped assessment and which comes to his notice subsequently in the course of the proceeding under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub section (2) of section 148, then, the view taken by the Tribunal cannot be sustained. In the present case, going by the dates mentioned in the chart referred in the Tribunal's order, the reasons are recorded for re-opening stated the two adjustments. They are in the notice issued on 9[th] June, 2005. Therefore, the Assessing Officer could have included the same in the proceedings under Section 147. The Tribunal's view, therefore, raises a substantial question of law and the appeal deserves admission. 3]We are unable to agree. The original assessment in the case of the assessee for assessment year 2001-02 was completed by the Assistant Commissioner of Income Tax, Circle-6(2), Mumbai, under section 143(3) of the Income Tax Act on 22[nd] March, 2004 determining the book profit 3]We are unable to agree. The original assessment in the case of the assessee for assessment year 2001-02 was completed by the Assistant Commissioner of Income Tax, Circle-6(2), Mumbai, under section 143(3) of the Income Tax Act on 22[nd] March, 2004 determining the book profit under Section 115JB of the Income Tax Act at Rs.55,44,06,947/-. Thereafter, the case was reopened under section 147 of the Income Tax Act on the ground that book profit under section 115JB of the Income Tax had been under assessed. Subsequently, the order under section 143(3)/147 was passed by the Assistant Commissioner of Income Tax of the same Circle on 29[th] November, 2006. The Commissioner of Income Tax on going through the order dated 29[th] November, 2006 noticed that while completing the reassessment, the Assessing Officer had failed to make necessary disallowance in terms of clause (f) of explanation (1) to section 115JB of the I. T. Act in respect of the dividend income claimed as exempt under section 10 of the I.T. Act and which resulted in under assessment of book profit. It is in these circumstances, that the Commissioner of Income Tax was of the opinion that the order passed by the Assessing Officer was erroneous in so far as it is prejudicial to the interest of the revenue. Further, facts are noted by the Tribunal in para-2.1 and 2.2 of the order. However, the Tribunal upheld the contention of the assessee and allowed its appeal essentially on the ground that the original order was passed on 22[nd] March, 2004. The reassessment notice was issued for the purpose of adding the arrears of depreciation debited to Profit and Loss Account and the revaluation reserves credited to the Profit and Loss Account to be reduced while computing book profit. The *4* 4.itxa229.12 Commissioner of Income Tax was aware that the period of limitation provided for in sub-section (2) of section 263 would commence from the date of original assessment which is on 22[nd] March, 2004 . The order of the Commissioner of Income Tax under section 263 of I.T. Act, is dated 30[th] March, 2009. It is in these circumstances, that we are of the opinion that the finding of fact recorded by the Tribunal on the point of the limitation, cannot be said to be vitiated by an error of law apparent on the face of the record nor it can be termed as perverse. It is a finding recorded on a mixed question. In such circumstances, the view taken, does not raises any substantial question of law. There is no question of explanation (3) being noticed by the Tribunal in this case and when the facts are as peculiar as noted above. Therefore, finding that in the facts peculiar to the case of the present assessee a finding on the point of limitation has been rendered in favour of the assessee, that we are of the opinion that the appeal does not raise any substantial question of law. It is accordingly dismissed. (B.P.COLABAWALLA, J.) (S.C. DHARMADHIKARI, J.) wadhwa 4/4