ACIT 3(2)(2), MUMBAI vs. NATIONAL BANK FOR AGRICULATURE AND RURAL DEVELOPEMENT, MUMBAI

1. 1. Aforesaid appeals by revenue for Assessment Years (AY) 2008-09 & 2009-10 contest separate orders of learned first appellate authority on certain common grounds. However, it is admitted position that issues are identical in both the years and adjudication in any one year shall equally apply to other year also.

The learned Sr. Counsel for assessee, at the outset, submitted that Ld.CIT(A) has quashed the reassessment proceedings by following appellate order for AY 2006-07. The revenue assailed the order for AY 2006-07 before this Tribunal vide order dated 12/09/2018 wherein the coordinate bench dismissed revenue’s appeal. It has been submitted that the facts are quite similar in this year and reassessment proceedings have been triggered on identical reasoning. The Ld. CIT-DR supported the assessment framed by Ld.AO.

We have carefully heard the rival submissions and perused relevant material on record including the cited order of Tribunal in assessee’s own case for AY 2006-07. Our adjudication to the subject matter of appeal would be as given in succeeding paragraphs.

The material facts are that an assessment was framed against the assessee for the year under consideration u/s 143(3) r.w.s. 147 on 24/02/2014 so as to make additions of interest paid by the assessee on deposits under Rural infrastructure development fund (RIDF). The original assessment was already completed u/s 143(3) on 23/03/2010. The case was reopened vide notice u/s 148 dated 26/03/2013 wherein it was alleged that assessee claimed interest expenditure on deposits under RIDF at flat rate of 6% irrespective of actual rates payable to commercial banks on RIDF deposit placed by banks which were in the range of 3%-6%. Thus, the differential interest on RIDF deposit was neither paid nor payable and accordingly, there was an under-assessment of income. Though the assessee defended its stand, however, the same could not find favor with Ld. AO who chose to increase assessee’s income to the extent of alleged under assessment. 6. Upon further appeal, Ld. CIT(A) quashed reassessment proceedings by relying upon appellate order for AY 2006-07 wherein it was observed that there was no fresh / new material before Ld. AO to initiate reassessment proceedings. The opinion was formed on the basis of same material which was available during Sec. 143(3) assessment proceedings. The reopening would not be permissible merely on the basis of new opinion formed on same material. Following the same, the reassessment proceedings were held to be against the law in this year also and accordingly, the issue on merits was held to be merely academic in nature. Aggrieved, the revenue is in further appeal before us. 7. We find that the revenue challenged the findings given in Appellate order for AY 2006-07 before this Tribunal vide order dated 12/09/2018 wherein coordinate bench dismissed the revenue’s appeal by confirming the appellate order. We find that similar facts exist during this year except for the fact that reopening has been done within 4 years from the end of relevant assessment year. However, the same would not materially alter the position since the original assessment was framed u/s 143(3). There was no fresh / new tangible material before Ld. AO which would lead to formation of belief that certain income escaped assessment. The belief was formed on the same material which was available during Sec. 143(3) assessment proceedings. It is settled law that Ld.AO has power to reassess but no power to review its own order. Therefore, going by the ratio of cited decision of Tribunal in assessee’s own case for AY 2006-07, we dismiss the grounds raised