HINDUSTAN STEELWORKS CONSTRUCTION LIMITED ,KOLKATA vs. ITO, WARD - 12(1), KOLKATA, KOLKATA

For the reasons stated in assessee’s petition dated 01.06.2018 and on account of no objection from department side, we condone four days’ delay in filing of the instant appeal.

It transpires at the outset that the assessee has raised an additional ground challenging validity of reopening initiated u/s 148/147 of the Act. A very strong objection has come from the Revenue side that this additional ground does not deserve to be admitted at second appellate stage. We find no merit in Revenue’s

Case file suggests at page 41 that the Assessing Officer recorded the following reason(s) whilst forming his belief that the assessee’s taxable income had escaped assessment during scrutiny proceedings finalized on 31.12.2009 u/s 143(3) of the Act:

There is hardly any dispute that we are in assessment year 2007-08 and the Assessing Officer initiated the impugned proceedings in the year 2014 i.e beyond a period of four years from the end of relevant assessment year. Learned departmental representative fails to rebut that there is not even a whisper in the Assessing Officer’s foregoing reopening reason that there has been any failure on assessee’s part in disclosing ‘fully and truly’ all material particulars in the earlier record. He has rather formed his impugned belief on verification of records already available with him.

We find no merit in Revenue’s arguments. The fact remains that the assessee had not recognized the sum in dispute of Rs.1640300000/- received from Govt. of India in the nature of grant-in-aid for the purpose of payment of old tax liability pertaining to assessment year 2000-2001. It reported the same in Note No.7(J) of the Notes on account alongwith balance sheet and also did not record the impugned sum as income in the P&L a/c at the threshold stage. Hon’ble jurisdictional high court’s decision in Jay Shree Tea & Industries Ltd. vs. DCIT (2000) 245 ITR 567(Cal) holds that such a disclosure does not mean that there has been any failure in not stating “fully and truly” all necessary particulars regarding computation of income. Their lordships latter decision in India Steamship Co. Ltd. vs. JCIT (2005) 275 ITR 155(Cal) also reiterates the very view.

This tribunal’s coordinate bench’s decisions in Dipak Kr. Dasbhowmik vs. ITO dated 23.02.2018 and ACIT vs. Fortune Steel Industries ITA No.3095/Mum/2006 dated 13.10.2010 also quash similar reassessment(s) wherein the Assessing Officer had not recorded the foregoing failure as prescribed u/s 147 1st proviso of the Act.

Learned departmental representative has quoted hon’ble Bombay high court’s decision in IPCA Laboratories Ltd. vs. DCIT [2001] 252 ITR 420 (Bombay) which is not applicable in facts of the instant case since the reopening therein was not beyond four years from the end of the relevant assessment year as in the instant case. We thus hold that the impugned reopening forming subject matter of the assessee’s former as well as additional substantive ground(s) deserves to be quashed on this count alone. Ordered accordingly. The assessee’s legal grounds to this effect stand accepted. All other pleadings on merits are rendered infructuous.

Before parting, it is noted that the order is being pronounced after ninety (90) days of hearing. However, taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. For coming to such a conclusion, we rely upon the decision of the Co-ordinate Bench of the Mumbai Tribunal in the case of DCIT vs. JSW Limited in & 6103/Mum/2018, Assessment Year 2013-14, order dt. 14th May, 2020.

This assessee’s appeal is allowed in above terms.