The Commissioner Of Income Tax – 10, Mumbai v. M/S.infrastructure Leasing & Financial Services Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.6430 OF 2010 The Commissioner of Income Tax – 10, Mumbai..Appellant. Versus M/s.Infrastructure Leasing & Financial Services Limited..Respondent. Ms.Suchitra Kamble for the appellant.Mr.P.J. Pardiwala, Senior Advocate with Mr.Atul K. Jasani for the respondent. P.C. : CORAM : J.P. Devadhar &K.K. Tated, JJ. DATE : 7[th] October 2011 1.Whether the Income Tax Appellate Tribunal was justified in holding that the reopening of assessment was bad in law is the question raised in this appeal. 2.The assessment year involved is assessment year 2000-01. 3.By a notice dated 28[th] March 2007, the assessment for assessment year 2000-01 was sought to be reopened by recording following reasons. “........... It is seen that while computing the book profit under Section 115JA of the Income Tax Act, 1961, lease equalization reserve amounting to Rs.70.44 crores, amount set aside for investment valuation amounting to Rs.3,38,989/-, amount set aside for non-performing assets amounting to Rs.14,84,00,000/- were not added to the book profit as per explanation to sub-section (2) of Section 115JA of the Income Tax Act, 1961. In view of the above, income chargeable to tax has escaped assessment coming within the meaning of Section 147 read with proviso thereto, by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment .....” 4.On the basis of the above reasons, the re-assessment order was passed by the assessing officer making certain additions. 5.The additions made by the assessing officer were deleted by the Commissioner of Income Tax (Appeals) by recording that all the facts set out in the reasons recorded for reopening of assessment were already on record and the same were considered while passing the original assessment order. Accordingly, the Commissioner of Income Tax (Appeals) held that there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for the purpose of assessment and, therefore, the reopening of assessment beyond four years from the end of the relevant assessment cannot be sustained. The order of Commissioner of Income Tax (Appeals) has been upheld by the Income Tax Appellate Tribunal. 6.In our opinion in the absence of any material to show that there was any failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment, no fault can be found with the decision of the Income Tax Appellate Tribunal in holding that the reopening of assessment beyond four years from the end of the relevant assessment year was bad in law. 6.Accordingly, the appeal is dismissed with no order as to costs. (K.K. Tated, J.) (J.P. Devadhar, J.)