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Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI D.S. SUNDER SINGH
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) – 1, Coimbatore, dated 26.08.2016 and pertains to assessment year 2007-08.
Shri R. Durai Pandian, the Ld. Departmental Representative, submitted that the assessee amortized a portion of project development expenditure and the balance amount was claimed as deferred revenue expenditure. This was noticed by the Assessing Officer after completion of original assessment. Therefore, the Assessing Officer reopened the assessment after issuing notice under Section 148 of the Income-tax Act, 1961 (in short 'the Act') on 11.06.2013. Due to wrong claim made by the assessee, there was an under assessment of income chargeable otherwise to tax.
Therefore, the Assessing Officer found that the income chargeable to tax has escaped assessment. Accordingly, the notice was issued. According to the Ld. D.R., the assessee claimed deferred revenue expenditure at `3,99,27,000/-. However, in the Profit & Loss account, the assessee amortized a sum of `1,33,49,000/-.
The balance amount of `2,65,78,000/- was claimed as deferred revenue expenditure. According to the Ld. D.R., the expenses which are not debited to Profit & Loss account cannot be allowed while computing total income. The Assessing Officer rightly reopened the assessment and disallowed the so-called expenditure of `2,65,78,000/-.
No one appeared for the assessee inspite of receipt of notice issued by RPAD. Therefore, we dispose of the appeal on merit after hearing the Ld. Departmental Representative.
From the orders of the lower authorities it appears that the assessee filed the return of income for the assessment year 2007- 08 on 13.11.2007 declaring a total loss of `62,77,473/-. Initially, the return was processed under Section 143(1) of the Act.
Subsequently, the assessment was completed under Section 143(3) of the Act on 31.12.2010 determining the total taxable income of `15,76,55,602/-. The assessment order dated 31.12.2010 was also rectified by an order passed under Section 154 of the Act on 19.04.2012. Accordingly, the Assessing Officer determined the total loss at `52,50,239/-.
We have carefully gone through the provisions of Section 147 of the Act. When the Assessing Officer has completed assessment under Section 143(3) of the Act, the completed assessment cannot be reopened under Section 147 of the Act unless there was negligence on the part of the assessee, after expiry of a period of four years from the end of the relevant assessment year. In this case, the four years period from the end of the relevant assessment year expired on 31.03.2012. However, the Assessing Officer issued notice under Section 148 of the Act only on 11.06.2013. Therefore, obviously, the assessment was reopened after expiry of four years from the end of the relevant assessment year. The assessee admittedly filed the Profit & Loss account and other details which are required for completing the assessment. Therefore, it cannot be said that there was any negligence on the part of the assessee. Merely because the Assessing Officer could not examine the Profit & Loss account filed by the assessee in the course of regular assessment, that cannot be a reason to say that the assessee has not filed relevant details.
This Tribunal is of the considered opinion that when the assessee provided all the relevant details before the Assessing Officer and the Assessing Officer has also completed assessment under Section 143(3) of the Act, it cannot be said that there was any negligence on the part of the assessee. Therefore, reopening of assessment beyond the period of four years from the end of the relevant assessment year is outside the scope of Section 147 of the Act. In view of the above, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
In the result, the appeal filed by the Revenue is dismissed.
Order pronounced on 31st January, 2017 at Chennai.