Vialle Alternative Fuel Systems Pvt. Ltd. Vs ITO (ITAT Delhi)
The bone of contention is the amendment to section 115JB of the Act by the Finance Act, 2009 w.r.e 01.04.2001 by which Explanation 1 to the section has been inserted. The book profit u/s 115JB of the Act had to be reworked out.
Court has held that beyond a period of 4 years, retrospective amendment u/s 115JB of the Act could not be a ground for reassessment. Such legal proposition requires no authority of law.
We are of the considered view that all the relevant facts were available on record and it could not be said that at the time when the assessee filed return, he had failed to disclose fully and truly all material facts necessary for assessment because the amendment which was introduced retrospectively was not there.
The law cannot contemplate the performance of an impossible act. For this proposition, we draw support from the decision of the Hon’ble Jurisdictional High Court in the case of SIL Investment Ltd 339 ITR 166.
In light of the above judicial decisions and facts on record, we have no hesitation to hold that there was no failure on the part of the assessee to fully and truly disclose all material facts to justify the reopening of the completed assessment. Therefore, we set aside the notice dated 04.12.2012 issued u/s 148 of the Act and quash the same resulting into the quashing of the assessment order dated 22.03.2013 framed u/s 143(3)/148 of the Act.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is preferred against the order of the CIT[A] – 09, New Delhi dated 09.03.2015 pertaining to Assessment Year 2005-06.
2. The assessee has raised the following substantive grounds of appeal:
“1. The ld. CIT(A) has erred in upholding the order u/s 143(3) / 148. The appellant contends that there is no tangible material brought on record for alleging income escaping assessment. Consequently, the reassessment order is wrong and bad in law, illegal, arbitrary and without jurisdiction and has to be quashed.
2. The appellant contends that there is no omission or failure on the part of the assessee in disclosing full and true particulars of income. Hence, the reassessment is wrong and bad in lawand has to be annulled.
3. The re-assessment proceedings arebased on mere change of opinion on an already completed assessment u/s 143(3) and therefore are without jurisdiction and should be cancelled.
4. The CIT(A) has erred in law and on facts in disallowing the claim of performance warranty. The appellant contends that it is an ascertained liability and should be allowed.
5. CIT(A) has erred in confirming the order of the AO with regard to re-computing the book profit u/s 115JB by adding performance warranty and provision for deferred tax liability which is wrong and bad in law. Such adjustments are not contemplated under section 115JB and therefore should be deleted.
6. The appellant prays that the order of CIT(A) was received on 25.4.2017 and appeal filed is within time. However, as the CIT(A) order is dated 9.3.2015, the delay due to non-receipt of order may kindly be condoned for which assessee is enclosing a separate affidavit.”
3. The representatives of both the sides were heard at length, the case records carefully perused and relevant documentary evidence brought on record duly considered.
4. Briefly stated, the facts of the case are that vide order dated 19.12.2007, assessment was framed u/s 143(3) of the Income-tax Act, 1961 [hereinafter referred to as ‘The Act’]. Total income of the assessee was computed as under:
