NTPC Ltd. Vs DCIT (ITAT Delhi)
Reassessment notice issued under Section 148 is invalid, if it is issued after the four-year of relevant assessment year
The assessee, NTPC Ltd, had filed its original return of income for the assessment year 2006-07 on November 14, 2006. The return was processed under Section 143(1) of the Income-tax Act, 1961. Subsequently, the assessee filed a revised return on March 20, 2007. The assessment was completed under Section 143(3) on November 26, 2007.
During the audit, certain discrepancies were noticed by the Revenue Audit Party, which were communicated to the assessee on September 8, 2008. The assessee replied to the audit objections on September 11, 2008. However, the Revenue did not respond to the assessee’s reply.
Reassessment Notice
On March 18, 2013, the Assessing Officer (AO) recorded reasons for reopening the assessment, citing that the assessee had claimed deductions on account of book adjustment in respect of exchange rate variation and stores written off, which were allegedly capital in nature. The AO issued a notice under Section 148 of the Income-tax Act, 1961, on March 18, 2013.
Grounds of Appeal
The assessee appealed to the ITAT, raising several grounds, including:
1. The reassessment notice was invalid as it was issued beyond the four-year period from the end of the relevant assessment year.
2. The AO had erred in recording reasons for reopening the assessment, as the assessee had disclosed all material facts necessary for assessment.
3. The AO had failed to appreciate that the assessee had claimed deductions on account of book adjustment and stores written off, which were revenue in nature.
ITAT’s Decision
