Case Law Details
The Nainital Bank Ltd. Vs Asstt. (ITAT Delhi)
When the assessee furnished all the facts and figures including the earning of the tax free income and the expenditure which was accepted by the learned AO, it is not open for the AO to say that the income escaped assessment because assessee did not reveal the method of arriving at the disallowance made u/s 14A during the assessment proceedings. The assessment proceedings are meant for verification of such thing and to say that no income has escaped assessment in so far as the facts and figures revealed in the return of income. If the AO accepts a figure under Rule 8D of the Rules in the order u/s 143(3) of the Act inasmuch as Section 14A and Rule 8D there on the statute book, the AO cannot say that since the assessee did not disclose the method of calculation, income escaped from assessment. The method to be followed is available in the shape of the provisions of Rule 8D of the Rules.
In the circumstances, we are of the considered opinion that the entire material is available before the AO when he framed the assessment u/s 143(3) of the Act and being aware of the assessee earning tax free income and incurring some expenditure, the AO accepted the expenditure offered by the assessee under Rule 8D of the Rules, as such, in the absence of any fresh tangible evidence to suggest that the assessee is guilty of not disclosing fully and truly all the material facts necessary for the assessment, it is not open for the AO to reopen the proceedings. Facts are revealed by the assessee and the method is contemplated by the Statute, as such, the assessee not revealing the method of calculation in no way resulted in any income being escaped from assessment. Any reason recorded by the AO on this aspect at a later point of time is only a change of opinion.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
I.T.A Nos.5347/Del/2016 and 5767/Del/2016 relate to the assessment year 2008-09 filed by the revenue and the assessee respectively challenging the order dated 28.7.2016 passed by the learned Commissioner of Income-tax(A), Haldwani Delhi {for short “ld.CIT(A)”) in Appeal No.191/CIT(A)/HLD/2015-16; whereas ITA Nos. I.T.A Nos.5348/Del/2016 and 5768/Del/2016 relate to the assessment year 2009-10 filed by the assessee and the revenue respectively challenging the order dated 28.7.2016 passed by the ld. CITA) in Appeal No.192/CIT(A)/HLD/2015-16. Since the parties and the question of fact involved in this matter was substantially the same, we deem it just and convenient to pass a common order.
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