Principal Commissioner Of Income Tax - 7 v. Rt Paper Board Ltd

$~2 *IN THE HIGH COURT OF DELHI AT NEW DELHI +ITA 746/2016 PRINCIPAL COMMISSIONER OF INCOME TAX - 7..... Appellant Through Mr. Sanjay Kumar and Mr. DileepShivpuri, Advs. versus RT PAPER BOARD LTD., Through None. ..... Respondent CORAM:HON'BLE MR. JUSTICE S. RAVINDRA BHATHON'BLE MR. JUSTICE NAJMI WAZIRIO R D E R%10.01.2017 1.The Revenue is aggrieved by the Income Tax AppellateTribunal’s (ITAT) order which allowed the assessee’s appeal. TheITAT held that the “the reasons to believe” which impelled theRevenue to reopen the assessment for the Assessment Year (AY)2003-04 was unsustainable. It is argued that the ITAT acted in errorof law. 2.The “reasons to believe” under section 147/148 are reproducedbelow: “Reasons: As per the 3 CD Report, the assessee hadclaimed prior period expenditure amounting to`5,61,67,181/- in the profit and loss account out ofwhich only` 1,17,24,633/- (17,40,605+99,84,028)related to AY 2002-03 and was claimed in the revisedreturn of AY 2002-03 and ` 2,52,14,220/ was added in the computation of taxable income. As the assesseewas following mercantile system of accountancy,balanceof`1,92,28,328/-(5,6,67,181-1,17,24,633+2,52,14,220) of prior period expensesshould have been disallowed. The omission to do soresulted in over assessment of loss of ` 1,92,28,328/-involving potential tax effect of ` 68,98,163/-. I have therefore reason to believe that a sum of `1,92,28,328/-chargeabletotaxhasescapedassessment. Thus the same is to be brought to tax u/s147/148 of the Act Notice u/s 148 may be issued, ifapproved. " 3.The ITAT relied upon the rulings of this Court to say that in theabsence of tangible indicative material, non disclosure, the re-assessment notice was recalled. This is in line with the judgment ofthe Supreme Court in CIT vs. Kelvinator (2010) 320 ITR 561 (SC). 4.No substantial question of law arises. The appeal is, therefore,dismissed. S. RAVINDRA BHAT, J JANUARY 10, 2017/acm NAJMI WAZIRI, J