M/s. DHFL Vysya Housing Finance Ltd., Bangalore V. ACIT, Bangalore

ITA 1416/BANG/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0665 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-12-2015
• Assessment Year: 1996-1997
• Appeal Filed On: 10-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Depreciation; Question of law; Reassessment proceedings; Capital expenditure
• Section: 143(3); 133A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NO.1416/BANG/2010 ASSESSMENT YEAR : 1996-97 M/S. DHFL VYSYA HOUSING FINANCE LTD., NO.3, 8 TH A MAIN ROAD, JVT TOWERS, SAMPANGIRAMA NAGAR, BANGALORE 560 027. PAN : AABCV 5640B VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 11(2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI S. ANANTHAN, C.A. RESPONDENT BY : SHRI FARAHAT HUSSAIN QURESHI, CIT-II(DR) DATE OF HEARING : 07.01.2013 DATE OF PRONOUNCEMENT : 11.01.2013 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 30.09.2010 OF CIT(APPEALS)-I, BANGALORE RELATING TO ASSESSMENT YEAR 1996- 97. ITA NO. 1416/BANG/2010 PAGE 2 OF 12 2. FIRST WE SHALL TAKE UP FOR CONSIDERATION GROUND NO.2 RAISED BY THE ASSESSEE WITH REGARD TO THE CHALLENGE TO THE VALIDI TY OF INITIATION OF REASSESSMENT PROCEEDINGS U/S. 148 OF THE INCOME TAX ACT, 1961 (THE ACT). THE SAID GROUND READS AS UNDER:- 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION OF RS.1,02,47,453/- ON THE LEASED MACHINERY. 3. THE FACTS AND CIRCUMSTANCES NECESSARY FOR ADJUDI CATION OF THE AFORESAID GROUND OF APPEAL ARE AS FOLLOWS. THE AS SESSEE IS A COMPANY WHICH IS ENGAGED IN THE BUSINESS OF HOUSING FINANCE . FOR THE A.Y. 1996- 97, THE ASSESSEE FILED A RETURN OF INCOME ON 29.01. 1996 DECLARING A TOTAL INCOME OF RS.75,60,330. FINALLY ASSESSMENT WAS MAD E U/S. 143(3) OF THE ACT ON A TOTAL INCOME OF RS.86,07,960. THE ADDITIO N MADE TO THE RETURNED INCOME WAS DISALLOWANCE OF DEPRECIATION CLAIMED ON SHARE OF RS.9,31,550. 4. THERE WAS A SURVEY CONDUCTED U/S. 133A OF THE AC T IN THE BUSINESS PREMISES OF ONE M/S. BELLARY STEELS & ALLOYS LTD. ( BSAL FOR SHORT) ON 10.09.2000. IN THE COURSE OF SURVEY, IT WAS FOUND THAT BSAL WAS ENTERING INTO LEASE TRANSACTIONS WITH VARIOUS PARTIES TO AVA IL OF FINANCE OF NON- EXISTING ASSETS. ACCORDING TO THE REVENUE, THE SUR VEY PROCEEDINGS REVEALED THAT SGCI ROLLS SAID TO HAVE BEEN PROCURED FROM VARIOUS FINANCIAL INSTITUTIONS IN FACT DID NOT EXIST. THE ASSESSEE I N THE A.Y. 1996-97 HAD CLAIMED DEPRECIATION AT 100% OF RS.1,02,47,453 OF S GCI ROLLS LEASED TO BSAL. ACCORDING TO THE AO, THE SURVEY REFERRED TO ABOVE PROVED THAT THE LEASE TRANSACTION WAS FICTITIOUS AND THEREFORE DEPR ECIATION ON SGCI ROLLS ITA NO. 1416/BANG/2010 PAGE 3 OF 12 LEASED TO BSAL CLAIMED BY THE ASSESSE AND ALLOWED I N THE ASSESSMENT OUGHT TO BE DISALLOWED. THE AO ACCORDINGLY ISSUED A NOTICE U/S. 148 OF THE ACT ON 17.03.2003. THE REASONS RECORDED BY THE AO BEFORE ISSUING NOTICE U/S. 148 OF THE ACT READS THUS:- THE ASSESSEE HAD CLAIMED RS. 1,02,47,453/- BEING DEPRECIATION @ 100% IN RESPECT MS ROLLS USED IN IRO N AND STEEL INDUSTRIES LEASED TO BELLARY STEELS AND ALLOYS LTD. ON 29-9-95 AND THE SAME WAS GRANTED IN THE ORDER U/S 143(3) DATED 31-10-1998. SUBSEQUENTLY A SURVEY WAS CONDUCTED U/S 133A IN THE CASE OF BELLARY STEELS AND ALLOYS LTD., ANANTHPUR, BELLARY ON 01-06- 2000. DURING THE SURVEY, IT WAS FOUND THAT COMPANY HAS ENTERED INTO BOGUS LEASE TRANSACTIONS WITH A NUMBER OF COMP ANIES INC1UDING THE ASSESSEE FOR TAKING MS ROLLS ON LEASE . ENQUIRIES MADE BY THE DDIT (INV.), HUBLI REVEALED THAT ALLEGE D SUPPLIERS OF THE MS ROLLS NAMELY M/S. B.M. STEELS, B.H. INTERNAT IONALS AND STEEL, SALES INTERNATIONAL WERE NEITHER CAPABLE OF MANUFACTURING THE SAID ROLLS NOR HAS AY TRANSPORTATION IN RESPECT OF SUCH ROLLS HAS TAKEN DATED 3-10-2000 ADDRESSED TO THE DDIT, HUBLI HAS ALSO CONFESSED THAT THE COMPANY RAISED LEASE FINANCE IN RESPECT OF NON-EXISTING ASSETS WITH A VIEW TO RAISE FUNDS FOR THE CAPITAL EXPENDITURE. IN VIEW OF THE ABOVE, THE LEASE TRANSACTIONS ENTE RED INTO BY THE ASSESSEE WITH BELLARY STEELS IS NOT A GENUINE L EASE TRANSACTION BUT ONLY A FINANCIAL TRANSACTION IN WHICH CASE THE DEPRECIATION CLAIMED BY THE ASSESSEE AMOUNTING TO RS. 1,02,47,45 3/- IS NOT AN ALLOWABLE DEDUCTION. THUS, HAVE REASONS TO BELIEVE THAT THE ASSESSEES INCOME HAS ESCAPED ASSESSMENT TO THE EXT ENT OF DEPRECIATION CLAIMED ON THE LEASED ROLLS REDUCED BY THE PRINCIPAL PORTION OF THE LEASE RENTALS OFFERED AS INCOME. REO PEN ASSESSMENT U/S 147 BY ISSUING NOTICE U/S 148. 5. BEFORE THE AO, THE ASSESSEE CHALLENGED THE VALID ITY OF INITIATION OF REASSESSMENT PROCEEDINGS. THE ASSESSEE SPECIFICAL LY SUBMITTED THAT BASED ON THE MATERIAL BEFORE THE AO, IT IS NOT POSS IBLE TO COME TO THE CONCLUSION THAT THERE WAS ANY ESCAPEMENT OF INCOME CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE. THE AO MAKING A REFEREN CE TO THE DECISION OF ITA NO. 1416/BANG/2010 PAGE 4 OF 12 THE HONBLE SUPREME COURT IN THE CASE OF PHOOL CHAND BAJRANG V. ITO, 203 ITR 456 (SC), HELD THAT WHEN THE TRANSACTION ITSELF WAS BOGUS, DEPRECIATION COULD NOT HAVE BEEN ALLOWED ON SUCH NO N-EXISTENT ASSETS AND THEREFORE THERE WAS AN ESCAPEMENT OF INCOME CHARGEA BLE TO TAX AND THE REOPENING OF ASSESSMENT WAS VALID. 6. BEFORE THE CIT(APPEALS), THE ASSESSEE SPECIFICAL LY SUBMITTED THAT UNDER PROVISO TO SECTION 147 OF THE ACT, WHERE AN A SSESSMENT HAS ALREADY BEEN MADE U/S. 143(3) OF THE ACT AND THE SAID ASSES SMENT IS SOUGHT TO BE REOPENED U/S. 147 OF THE ACT AFTER EXPIRY OF FOUR Y EARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, THEN ESCAPEMENT OF INCOME CHARGEABLE TOT AX SHOULD BE BY REASON OF FAILURE ON THE PART OF THE A SSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSE SSMENT FOR THAT ASSESSMENT YEAR. THE ASSESSEE SUBMITTED THAT ADMIT TEDLY THE ASSESSMENT OF THE ASSESSEE WAS ALREADY MADE U/S. 143(3) OF THE ACT AND THE SAME WAS SOUGHT TO BE REOPENED AFTER A PERIOD OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR AND THEREFORE THE CONDITION CONTEMP LATED BY THE PROVISO SHOULD BE FULFILLED FOR REOPENING OF THE ASSESSMENT . THE ASSESSEE SUBMITTED THAT THE REASONS RECORDED BY THE AO DO NO T MENTION THAT THERE WAS ANY SUCH FAILURE ON THE PART OF THE ASSESSE. I T WAS SUBMITTED THAT SUCH A CONCLUSION SHOULD BE REACHED AND RECORDED BY THE AO IN THE REASON RECORDED FOR REOPENING THE ASSESSMENT U/S.147 OF TH E ACT. FAILURE ON THE PART OF THE AO IN THIS REGARD SHOULD RESULT IN THE INITIATION OF REASSESSMENT PROCEEDINGS BEING REGARDED AS BAD IN LAW. ITA NO. 1416/BANG/2010 PAGE 5 OF 12 7. ON THE ABOVE SUBMISSIONS OF THE ASSESSEE, THERE IS NO SPECIFIC DISCUSSION IN THE ORDER OF THE CIT(APPEALS). THE C IT(APPEALS) HAS DISCUSSED THE VALIDITY OF INITIATION OF REASSESSMEN T PROCEEDINGS AND HAS AGAIN REITERATED THE STAND OF THE AO PLACING RELIAN CE ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF PHOOL CHAND BAJRANG V. ITO (SUPRA). THE CIT(APPEALS) HAS ALSO MADE A REFERENCE TO THE F OLLOWING DECISIONS:- (I) ACIT V. BANSWARA SYNTEX LTD., 272 ITR 642 (RAJ) THIS WAS A CASE OF REOPENING OF ASSESSMENT ALREADY COMPLETED U/S. 143(3) OF THE ACT WHICH WAS SOUGHT T O BE REOPENED AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. (II) PRAFULLA CHANDRA PATEL V. AICT, 236 ITR 882 (GUJ) IN THIS DECISION, THERE IS A SPECIFIC FINDING THAT THERE WAS A FAILURE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FA CTS BY THE ASSESSEE. (III) PRINCE GUTKA LTD. V. DY. CIT, 88 ITD 533 (DEL-TRIB) (IV) ADITYA MILLS LTD. V. UOI & ORS., 214 ITR 669 (RAJ) AS ALREADY STATED, THESE DECISIONS ARE NOT WITH SPE CIFIC REFERENCE TO PROVISO TO SECTION 147 OF THE ACT. 8. THE FINAL CONCLUSION OF THE CIT(A) ON THIS ISSUE WAS AS FOLLOWS:- ITA NO. 1416/BANG/2010 PAGE 6 OF 12 9. THE RATIO OF ALL THOSE CASES CITED SUPRA IS TH AT IF SUBSEQUENT TO ORIGINAL ASSESSMENT U/S.143(3) OF I.T.ACT, EVEN AFTER 4 YEARS FROM THE END OF RELEVANT ASST. YEAR, THE PROVISO TO S.147 OF I.T.ACT WOULD NOT BE CONSIDERED A BAR, IF THE A.O. TRODS UPON SPECIFIC, RELIABLE AND RELEVANT INFORMATION UPON WH ICH HE CAN FORM THE REASONS TO BELIEF THAT INCOME CHARGEABLE T O TAX HAS ESCAPED ASSESSMENT, HE CAN ISSUE NOTICE OF REASSESS MENT BECAUSE SUCH NEW INFORMATION ITSELF TANTAMOUNTS THAT THERE HAD BEEN FAILURE ON THE PART OF THE ASSESSEE TO MAKE THE TRU E AND FULL DISCLOSURE OF ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT, ALREADY CONCLUDED. IN THIS CASE ALSO INFORMATION HA S COME TO THE POSSESSION OF THE A.O. AS A RESULT OF SURVEY SUBSEQ UENT TO ORIGINAL ASSESSMENT AND SUCH INFORMATION HAS LED THE A.O. TO FORMULATE THE REASONS FOR THE BELIEF THAT THE LEASE TRANSACTI ON WAS A BOGUS ONE WHICH WAS IN THE KNOWLEDGE OF THE APPELLANT FRO M THE BEGINNING AND THEREFORE THERE WAS NO FULL AND TRUE DISCLOSURE AT THE TIME OF COMPLETION OF ORIGINAL ASSESSMENT. HENC E, I FIND THE ASSUMPTION OF JURISDICTION BY ISSUANCE OF A NOTICE U/S.148 OF I.T.ACT IS GOOD IN LAW. THUS THE FIRST ISSUE IS DEC IDED AGAINST THE APPELLANT. GROUNDS OF APPEAL RAISED IN GROUND NOS.1 ,2,3 & 4 AND 6 ARE DISMISSED. 9. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS), THE ASSESSEE HAS RAISED GROUND NO.2 BEFORE THE TRIBUNAL. WE HAVE HEARD THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE AND THE LD. DR. THE LD. C OUNSEL FOR THE ASSESSEE AFTER MAKING A REFERENCE TO THE REASONS RECORDED BY THE AO BEFORE ISSUE OF NOTICE U/S. 148 OF THE ACT SUBMITTED THAT NOWHERE I N THE REASONS RECORDED BY THE AO, HAS THE AO MENTIONED THE FACT THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSED FULLY AND TRULY ALL MA TERIAL FACTS NECESSARY FOR THE ASSESSMENT FOR THE A.Y. 1996-97. OUR ATTENTION WAS DRAWN TO THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF HINDUSTAN LEVER LTD. V. R.B. WADKAR (2004) 137 TAXMANN 479 (B OM ) . IN THE AFORESAID CASE, THE QUESTION THAT AROSE FOR CON SIDERATION WAS WITH REGARD TO THE VALIDITY OF THE INITIATION OF REASSES SMENT PROCEEDINGS U/S. 147 ITA NO. 1416/BANG/2010 PAGE 7 OF 12 OF THE ACT IN A CASE WHERE ASSESSMENT HAD ALREADY B EEN COMPLETED U/S. 143(3) OF THE ACT AND NOTICE U/S. 148 WAS ISSUED AF TER EXPIRY OF A PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THE HONBLE BOMBAY HIGH COURT AFTER NOTICING THAT THE CONDITION LAID DOWN IN THE PROVISO WAS NOT SATISFIED, OBSERVED AS FOLLOWS:- THE REASONS RECORDED BY THE ASSESSING OFFICER NOWH ERE STATED THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DI SCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSME NT OF THAT ASSESSMENT YEAR. THE REASONS ARE REQUIRED TO BE REA D AS THEY WERE RECORDED BY THE ASSESSING OFFICER. NO SUBSTITUTION OR DELETION IS PERMISSIBLE. NO ADDITIONS CAN BE MADE TO THOSE REAS ONS. NO INFERENCE CAN BE ALLOWED TO BE DRAWN BASED ON REASO NS NOT RECORDED. IT IS FOR THE ASSESSING OFFICER TO DISCLO SE AND OPEN HIS MIND THROUGH REASONS RECORDED BY HIM. HE HAS TO SPE AK THROUGH HIS REASONS. IT IS FOR THE ASSESSING OFFICER TO REA CH TO THE CONCLUSION AS TO WHETHER THERE WAS FAILURE ON THE P ART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR HIS ASSESSMENT FOR THE CONCERNED ASSESSMENT YEAR. I T IS FOR THE ASSESSING OFFICER TO FORM HIS OPINION. IT IS FOR HI M TO PUT HIS OPINION ON RECORD IN BLACK AND WHITE. THE REASONS R ECORDED SHOULD BE CLEAR AND UNAMBIGUOUS AND SHOULD NOT SUFF ER FROM ANY VAGUENESS. THE REASONS RECORDED MUST DISCLOSE HIS M IND. REASONS ARE THE MANIFESTATIONS OF MIND OF THE ASSESSING OFF ICER. THE REASONS RECORDED SHOULD BE SELF-EXPLANATORY AND SHO ULD NOT KEEP THE ASSESSEE GUESSING FOR THE REASONS. REASONS PROV IDE LINK BETWEEN CONCLUSION AND EVIDENCE. THE REASONS RECORD ED MUST BE BASED ON EVIDENCE. THE ASSESSING OFFICER, IN THE EV ENT OF CHALLENGE TO THE REASONS, MUST BE ABLE TO JUSTIFY T HE SAME BASED ON MATERIAL AVAILABLE ON RECORD. HE MUST DISCLOSE I N THE REASONS AS TO WHICH FACT OR MATERIAL WAS NOT DISCLOSED BY T HE ASSESSEE FULLY AND TRULY NECESSARY FOR ASSESSMENT OF THAT AS SESSMENT YEAR, SO AS TO ESTABLISH VITAL LINK BETWEEN THE REASONS A ND EVIDENCE. THAT VITAL LINK IS THE SAFEGUARD AGAINST ARBITRARY REOPENING OF THE CONCLUDED ASSESSMENT. THE REASONS RECORDED BY THE A SSESSING OFFICER CANNOT BE SUPPLEMENTED BY FILING AFFIDAVIT OR MAKING ORAL SUBMISSION, OTHERWISE THE REASONS WHICH WERE LACKIN G IN MATERIAL PARTICULARS WOULD GET SUPPLEMENTED, BY THE TIME THE MATTER REACHES THE COURT, ON THE STRENGTH OF AFFIDAVIT OR ORAL SUBMISSION ADVANCED. ITA NO. 1416/BANG/2010 PAGE 8 OF 12 10. OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT AND ACIT V. HEWELETT PACKARD DIGITAL GLOBAL SOLUTIONS LTD., ITA NO.406 OF 2007, JUDGMENT DATED 19.09.2011 , WHEREIN THE HONBLE KARNATAKA HIGH COURT AFTER MA KING A REFERENCE TO THE DECISION OF THE HONBLE BOMBAY HIG H COURT IN THE CASE OF HINDUSTAN LEVER LTD. (SUPRA) OBSERVED AS FOLLOWS:- 7. IT IS OBSERVED IN THE SAID JUDGMENT THAT THE R EASON RECORDED BY THE ASSESSING OFFICER NO WHERE STATE THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRUL Y ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT OF THAT ASSESSME NT YEAR. IT IS FOR THE ASSESSING OFFICER TO DISCLOSE AND OPEN HIS MIND THROUGH REASONS. HE HAS TO SPEAK THROUGH HIS REASONS. IT IS FOR THE ASSESSING OFFICER TO REACH THE CONCLUSION AS TO WHE THER THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THE -CONCERNED ASSESSMENT YEAR. IT IS FOR THE ASSESSING OFFICER TO FORM HIS OPINION. IT IS FOR HIM TO PUT HIS OPINION ON RECORD IN BLACK AND WHITE. THE REASONS RECORDED SHOULD BE CLEAR AND UNA MBIGUOUS AND SHOULD NOT SUFFER FROM ANY VAGUENESS. THE REASO NS RECORDED MUST DISCLOSE, HIS MIND. THE REASONS ARE THE MANIFE STATION OF THE MIND OF THE ASSESSING OFFICER. THE REASONS RECORDED SHOULD BE SELF-EXPLANATORY AND SHOULD NOT KEEP THE ASSESSEE G UESSING FOR THE REASONS. REASONS PROVIDE THE LINK BETWEEN CONCL USION AND EVIDENCE. THE ORDER PASSED BY THE ASSESSING AUTHORI TY DID NOT STATE ANYWHERE THAT THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECE SSARY FOR THE ASSESSMENT OF THAT YEAR. ALL THAT HAS BEEN STATED I N THE ORDER IS THAT THE ASSESSEE HAS APPENDED THE NOTE AND AT NO P OINT OF TIME, THE ASSESSEE HAS DISCLOSED AS TO THE NEXUS BETWEEN THE AMOUNT OF RS. 10,06,617/- AND THE 10A UNIT. THE DISCLOSURE HA S TO BE FULL AND TRUE. BOTH THE CRITERIA HAVE TO BE MET. IN THE ASSESSEES CASE, BY FAILING TO BRING OUT THE NEXUS BETWEEN THE 10A U NIT AND THE INTEREST INCOME, THE ASSESSEE HAS NOT DISCHARGED IT S RESPONSIBILITY OF FURNISHING FULL DISCLOSURE OF FACTS. AS SET OUT ABOVE, THE NOTE CLEARLY SETS OUT THE INTEREST INCOME EARNED BY THE STP UNIT AND THE CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER SECTI ON 10A. IT IS NOT THE REQUIREMENT OF LAW THAT FURTHER THE ASSESSE E SHOULD SHOW THE NEXUS BETWEEN THE AMOUNT CLAIMED AND 10A UNIT. WHEN HE HAS CATEGORICALLY STATED THAT THE INTEREST, WHICH I S EARNED FROM STP UNIT, IS ELIGIBLE FOR EXEMPTION UNDER SECTION 1 0A, EVEN THAT ITA NO. 1416/BANG/2010 PAGE 9 OF 12 NEXUS IS MANIFEST. THE ASSESSING AUTHORITY HAS NOT PROPERLY APPLIED HIS MIND TOWARDS THE STATUTORY PROVISIONS A ND HAS NOT TAKEN INTO CONSIDERATION THAT THE ORIGINAL ASSESSME NT PASSED UNDER SECTION 143(3) WHICH WAS ALSO REOPENED ONCE AND ADJ USTMENT WAS MADE. IT IS FOR THE SECOND TIME, HE WAS RAISING ALL THESE OBJECTIONS. WHEN ADMITTEDLY THE SECOND REOPENING OF THE ASSESSMENT IS BEYOND FOUR YEARS, UNDER LAW, IT IS B ARRED BY TIME AND THE FINDINGS RECORDED BY THE TRIBUNAL IS LEGAL AND VALID AND DOES NOT SUFFER FROM ANY LEGAL INFIRMITY. IN THAT V IEW OF THE MATTER, NO SUBSTANTIAL QUESTION OF LAW ARISES FOR C ONSIDERATION IN THESE APPEALS. ACCORDINGLY, THE APPEALS ARE DISMISS ED. 11. BESIDES THE ABOVE, SEVERAL OTHER DECISIONS WERE BROUGHT TO OUR NOTICE ON IDENTICAL PROPOSITION AS LAID DOWN IN THE AFORESAID DECISIONS. WE ARE NOT MAKING A REFERENCE TO THOSE DECISIONS. WE WOULD, HOWEVER, MAKE A REFERENCE TO THE RECENT DECISION OF THE HONBLE B OMBAY HIGH COURT IN THE CASE OF LOK HOUSING & CONSTRUCTION LTD. V. DCIT, 348 ITR 33 5 (BOM) , WHEREIN IT WAS OBSERVED AS FOLLOWS:- THE POWER OF THE ASSESSING OFFICER TO REOPEN BEY OND A PERIOD OF FOUR YEARS IS EVEN MORE RESTRICTED THAN WHEN THE REOPENING TAKES PLACE WITHIN A PERIOD OF FOUR YEARS OF THE EN D OF THE RELEVANT ASSESSMENT YEAR. IN THE CASE OF THE ASSESSEE, THE C ONDITION PRECEDENT TO THE INVOCATION OF THE JURISDICTION WAS CLEARLY ABSENT SINCE THERE WAS NOT EVEN AN AVERMENT TO THE EFFECT THAT THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE F ULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. TH US, THE ASSESSING OFFICER HAD CLEARLY ACTED IN EXCESS OF JU RISDICTION IN PURPORTING TO REOPEN THE ASSESSMENT, BEYOND A PERIO D OF FOUR YEARS FOR THE ASSESSMENT YEAR 2004-05 BY HIS NOTICE . 12. IT WAS THUS SUBMITTED BY THE LD. COUNSEL FOR TH E ASSESSEE THAT REOPENING OF THE ASSESSMENT SHOULD BE HELD TO BE BA D IN LAW, AS THE AO IN THE PRESENT CASE HAS NOT RECORDED SPECIFICALLY THAT ESCAPEMENT OF INCOME ITA NO. 1416/BANG/2010 PAGE 10 OF 12 WAS DUE TO THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THE A.Y. 1996-97. 13. THE LD. DR, ON THE OTHER HAND, RELIED ON THE OR DER OF THE CIT(APPEALS) AND DECISIONS REFERRED TO BY HIM IN HI S ORDER. WE HAVE ALREADY SEEN THAT THE DECISIONS REFERRED TO BY THE CIT(A) IN HIS ORDER DID NOT DEAL WITH THE PROVISO TO SEC.147 OF THE ACT WHERE T HERE IS NO RECORDING IN THE REASONS RECORDED BEFORE REOPENING THAT THERE WA S FAILURE ON THE PART OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL FACTS NECESSARY FOR HIS ASSESSMENT. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FROM A PERUSAL OF THE REASONS RECORDED BY THE AO BEFORE ISSUING NOTICE U/ S. 148 OF THE ACT, IT IS CLEAR THAT THE AO HAS NOT, IN THE REASONS RECORDED, MADE AN ALLEGATION THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT BY REASON OF THE ASSESSEES FAILURE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR. I T IS NOT IN DISPUTE THAT FOR A.Y. 1996-97, AN ASSESSMENT U/S. 143(3) HAD ALR EADY BEEN MADE IN THE CASE OF THE ASSESSEE BY AN ORDER OF ASSESSMENT DATE D 31.03.1998. ADMITTEDLY NOTICE U/S. 148 OF THE ACT WAS ISSUED ON 17.03.2003 WHICH IS BEYOND THE PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR (1996-97). THE PROVISO TO SECTION 147 WAS THE REFORE CLEARLY ATTRACTED. IT IS CLEAR FROM THE DECISION OF THE HONBLE BOMBAY HIGH COURT AS WELL AS THE HONBLE KARNATAKA HIGH COURT, REFERRED TO BY TH E LD. COUNSEL FOR THE ASSESSEE BEFORE US, THAT THERE SHOULD BE A SPECIFIC AVERMENT IN THE REASONS RECORDED THAT ESCAPEMENT OF INCOME CHARGEAB LE TO TAX WAS BY ITA NO. 1416/BANG/2010 PAGE 11 OF 12 REASON OF THE FAILURE ON THE PART OF THE ASSESSEE T O DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. SUCH AN ALLEGATION IS ADMITTEDLY ABSENT IN THE REAS ONS RECORDED. THE LD. CIT(A) HAS IN HIS ORDER HAS ATTEMPTED TO GIVE DIFFE RENT REASONS FOR RESORTING TO REASSESSMENT PROCEEDINGS. THE LAW IS WELL SETTL ED THAT VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS HAVE TO BE J UDGED ON THE BASIS OF REASONS RECORDED BY THE AO AND IT IS NOT POSSIBLE T O SUBSTITUTE, DELETE OR ADD ANYTHING TO SUCH REASONS RECORDED BY THE AO. I T IS ALSO NOT POSSIBLE TO DRAW ANY INFERENCE BASED ON THE REASONS NOT RECORDE D. IN THE LIGHT OF THE LAW AS LAID DOWN IN THE AFORESAID DECISIONS, WE ARE OF THE VIEW THAT INITIATION OF REASSESSMENT PROCEEDINGS BY THE AO IN THE PRESEN T CASE IS NOT IN ACCORDANCE WITH THE LAW. THE ORDER OF REASSESSMENT IS THEREFORE LIABLE TO BE ANNULLED AND THE SAME IS HEREBY ANNULLED. 15. IN VIEW OF THE DECISION ON THE VALIDITY OF INIT IATION OF REASSESSMENT PROCEEDINGS, THE OTHER ISSUES RAISED BY THE ASSESSE E ON MERITS DO NOT REQUIRE ANY CONSIDERATION. CONSEQUENTLY, THE APPEA L OF THE ASSESSEE IS ALLOWED. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. PRONOUNCED IN THE OPEN COURT ON THIS 11 TH DAY OF JANUARY, 2013. SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBE R BANGALORE, DATED, THE 11 TH JANUARY, 2013. DS/- ITA NO. 1416/BANG/2010 PAGE 12 OF 12 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.