IN HIGH COURT OF JUDICATURE AT MADRAS DATE : 15.12.2014 CORAM HONOURABLE MR. JUSTICE R.SUDHAKAR AND HONOURABLE MR. JUSTICE R.KARUPPIAH T.C.A. NO. 257 OF 2014 Commissioner of Income Tax Chennai. .. Appellant - Vs - M/s.Thejo Engineering Ltd. 41, Cathedral Road Chennai 600 086. .. Respondent Appeal filed under Section 260-A of Income Tax Act against order dated 14.11.13 passed by Income Tax Appellate Tribunal, Madras 'D' Bench, made in ITA No.1103/Mds/2013. For Appellant : Ms. Hema Muralikrishnan for Mr. T.Ravikumar For Respondent : Mr. Vijayaraghavan for M/s.Subbaraya Iyer JUDGMENT (DELIVERED BY R.SUDHAKAR, J.) Aggrieved by order of Appellate Tribunal in dismissing appeal filed by it, Revenue is before this Court challenging said order by filing present appeal by raising following questions of law :- 2 1) Whether on facts and circumstances of case, Tribunal was right in holding that validity of reopening was not proper? 2) Whether finding of Tribunal is proper by holding that there was no failure on part of assessee in disclosing fully and truly all material facts in course of assessment proceedings and that order passed was not sustainable in eyes of law especially when assessee is bearing liability by paying excise duty on contract works? 2. respondent in respect of Assessment Year 2001-2002 filed original return of income on 31.10.01 declaring total income of Rs.91,16,490/=. No assessment under Section 143 (1) was made on said return. Subsequently, notice under Section 148 of Act was issued on 26.3.08 on plea of income having escaped assessment. Notice under Section 148 of Act was contested on merits before Assessing Officer unsuccessfully and assessee went on appeal before CIT (Appeals), who confirmed order of Assessing Officer. Aggrieved against said order, assessee filed appeal before Tribunal and Tribunal, in its turn, took different route in matter and came to hold that in respect of assessment year 2001-2002, reopening notice was issued on assessee on 26.3.08 well after period of four years from date of impugned assessment order. Reliance was also placed on Section 147 and proviso thereto, which is quoted hereunder :- Income escaping assessment. 147. If Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of proceedings under this section, or recompute loss or depreciation allowance or any other allowance, as case may be, for assessment 3 year concerned (hereafter in this section and in sections 148 to 153 referred to as relevant assessment year) : Provided that where assessment under sub-section (3) of section 143 or this section has been made for relevant assessment year, no action shall be taken under this section after expiry of four years from end of relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of failure on part of assessee to make return under section 139 or in response to notice issued under subsection (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: Provided further that Assessing Officer may assess or reassess such income, other than income involving matters which are subject-matter of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. 3. Tribunal came to hold that there was no material to show that assessee failed to disclose fully and truly any material facts necessary for assessment for that assessment year and, therefore, Department had failed to discharge requirement of proviso to Section 147 and as result, notice issued on 26.3.08 is beyond four years and, therefore, bad and, accordingly, appeal was allowed. 4. above order of Tribunal is challenged by Department in present appeal contending that for invoking proviso to Section 147, pre-condition is that there should be assessment under sub-section (3) of Section 143, which is absent in present case and Tribunal fell in error to come to conclusion that there was case of assessment under Section 143 (3) and, therefore, proviso will apply. 5. It is not disputed by respondent, as has already been recorded by this Court, that return was filed on 31.10.01 and no order has been passed on said assessment. 4 Therefore, it is abundantly clear that proviso to Section 147 of Act does not get attracted. Tribunal, admittedly, fell in error in holding that it is case falling under proviso to Section 147. On this legal plea, objection raised by Department is sustainable and, accordingly, same is sustained. 6. In such view of matter, this Court is not venturing into questions of law raised by Revenue. On above stated reasons, order of Tribunal is set aside and matter is remanded back to Tribunal to consider all issue on merits. 7. In result, this appeal filed by Revenue is allowed by way of remand. However, there shall be no order as to costs. (R.S.J.) (R.K.J.) 15.12.2014 Index : Yes/No Internet : Yes/No GLN To 1. Income Tax Appellate Tribunal Madras 'D' Bench Chennai. 2. Commissioner of Income Tax Chennai. 5 R.SUDHAKAR, J. AND R.KARUPPIAH, J. GLN T.C.A. NO. 257 OF 2008 15.12.2014 Commissioner of Income-tax, Chennai v. M/s. Thejo Engineering Ltd