ITAT quashes reassessment framed u/s.143(3) of Income Tax Act beyond 4 years on absence of establishing failure on part of assessee [Read Order]

The Income Tax Appellate Tribunal (ITAT), Chennai bench  quashed reassessment framed under section 143(3) of the Income Tax Act, 1961 beyond 4 years in absence of establishing failure on part of assessee.

The assessee, Villupuram District Central Co-operative Bank  is a co-operative bank and it files its return of income originally i.e. e-return for the relevant assessment year 2008-09 on 29.09.2008. Assessee’s case was selected for scrutiny.

Thereafter, the assessment was completed and the AO made certain additions by making disallowance of inadmissible items and also recomputed the claim of deduction under Section 36(1)(viia) of the Income Tax Act.

When the appeal  against the assessment order was pending before the CIT(A) the AO initiated reassessment proceedings and framed under Section 143(3) of the Income Tax Act by making disallowance of deduction of Rs.3,47,01,173/- towards release of provisions and non-statutory reserves.

Aggrieved by the order, the assessee filed an appeal  before the CIT(A) who  quashed the reopening by holding that the reopening is beyond four years and assessee’s case falls under first proviso to section 147 of the Income Tax Act as the original assessment was completed under Section 143(3) of the Income Tax Act.

The Tribunal while considering the appeal observed that  notice under Section 148 of the Act was issued beyond 4 years and assessee’s case falls under provision to section 147 of the Act.

Accordingly, Revenue could not establish anything that there is any failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the relevant assessment year.

After reviewing the facts and records, the two-member bench of Manjunatha.G, (Accountant member) and  Mahavir Singh,(Vice President)  observed that In the absence of any failure on the part of the assessee to disclose fully and truly all material facts and assessment framed under Section 143(3) of the Income Tax Act and now reopening beyond 4 years which is against the provisions of the Income Tax Act.

K. Ravi, counsel appeared for assessee and N.B. Som,  counsel appeared for revenue.

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