Case Law Details
City Union Bank Limited Vs ACIT (Madras High Court)
Conclusion: Reassessment could not be reopened on basis of change of opinion in case the matter of dis allowance had already been considered during the original assessment proceedings because the authority could not take advantage of their own wrong if they failed to perform their statutory duty.
Held: Assessee-bank received notice under section 148 proposing to initiate proceedings under section 147. Assessee contended that the notice was issued beyond four years from the end of the assessment year and there had been no failure on the part of the bank in submitting the material facts for assessment. Assessee had orally gathered information that the reasons for initiating the proceedings under Section 147 was that the disallowance made under Section 14 A was not computed as per the method prescribed under the Income Tax Rules, 1962 and even in the order of original assessment, the issue of disallowance had been discussed and disallowance was made as per the method adopted in the previous year. It was held there was no failure on the part of assessee however, there appeared to be a failure on the part of AO to make an appropriate determination of the amount of expenditure in terms of Section 14 A. That would amount to exercising the power of review which the statute had not conferred on the authority. This was particularly because the attempt to reopen was made after the expiry of 4 years from the end of the assessment year and the original assessment was made under Section 143(3). The authority could not take advantage of their own wrong. If they failed to perform their statutory duty, the consequence of default could not fall on assessee.
FULL TEXT OF THE HIGH COURT ORDER / JUDGEMENT
The petitioner-assessee is a banking company. It filed its return of income on 30.09.2011 for the assessment year 2011-12 admitting a total income of Rs.190,30,75,570/-. The return was processed under Section 143(1) of the Income Tax Act, 1961 on 08.02.2012. The case was taken up for scrutiny and notice under Section 143(2) was issued on 02.08.2012. In response to the said notice, the assessee filed the necessary documents. Thereafter, the order dated 14.03.2014 was passed under Section 143(3) of the Act assessing the total income at Rs. 268,45,50,527/-. Certain additions were made. The assessment order is now under challenge before the appellate authority.
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