Case Law Details
Mehsana Urban Co-op. Bank Ltd. Vs ACIT (ITAT Ahmedabad)
Introduction: In the case of Mehsana Urban Co-op. Bank Ltd. vs ACIT, heard by the Income Tax Appellate Tribunal (ITAT) Ahmedabad, the validity of a reassessment under section 147 of the Income Tax Act, 1961, was challenged. The case involved disputes over deductions and disallowances for assessment years 2012-13, 2017-18, and 2018-19. The primary parties were the assessee, Mehsana Urban Co-op. Bank Ltd., and the revenue authority represented by the Assistant Commissioner of Income Tax (ACIT). The legal issue revolved around the jurisdiction of the Assessing Officer (AO) to reopen assessments beyond the prescribed timeframe.
Background: The reassessment orders were challenged by Mehsana Urban Co-op. Bank Ltd. before the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi. The appeals were consolidated and taken up by the ITAT Ahmedabad. The key contention stemmed from the AO’s decision to reopen assessments beyond four years from the end of the relevant assessment years without evidence of the assessee’s failure to disclose material facts. The legal basis for the reassessment, under section 147 of the Act, was disputed.
Contention of the Assessee: Mehsana Urban Co-op. Bank Ltd. argued that the reassessment lacked jurisdiction as there was no failure on their part to disclose material facts. They contended that computational errors, such as an incorrect provision for bad and doubtful debts, did not constitute a failure to disclose. Citing legal precedent, they emphasized that jurisdictional conditions for reassessment were not met.
Contention of Revenue: The revenue authority, represented by the ACIT, defended the reassessment, asserting that the assessee failed to disclose material facts regarding deductions claimed under sections 36(1)(viia) and 36(1)(viii) of the Act. They argued that the incorrect computation of deductions warranted reassessment under section 147.
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