INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA No. 3551/Del/2016 (Assessment Year: 2003-04) ACIT, Vs. Fertilizer Corporation of Circle-25(1), India Ltd, PDIL Bhawan, CR Building, IP Estate, A-14, Sector-1, Noida New Delhi PAN: AACF1661F (Appellant) (Respondent) Revenue by : Shri Sanjay Goyal, CIT DR Assessee by: Shri Sanjay Agarwal, CA Date of Hearing 01/07/2019 Date of pronouncement 11/09/2019 ORDER PER PRASHANT MAHARISHI, A. M. 1. This is appeal filed by revenue against order of ld CIT (A)-3, New Delhi dated 18.03.2016 for Assessment Year 2003-04. 2. revenue has raised following grounds of appeal:- 1. On facts and in circumstances of case and in law order passed by ld CIT(A) is erroneous and CIT(A) has erred in quashing notice issued u/s 148 without appreciating that case was covered by Explanation 1 below section 147, particularly as assessee itself had made on incorrect claim in respect of allowability of VRS expenditure. 3. Brief fact shows that assessee filed its return of income on 25/11/20 03 declaring loss of INR 7 596177420/ which was assessed u/s 143 (3) on 18/1/2006 at loss of INR 3 352087581/ . 4. learned assessing officer issued notice u/s 148 of act on 30/6/2008 for same assessment year recording following reasons:- original return of income in this case was filed on 25/11/2003 showing loss of INR 7596177420/ against which assessment was completed at nil income after adjusting brought forward losses of INR 3 352087581/ . (2) during relevant previous year corresponding to assessment year under consideration assessee is derived Page | 1 income from manufacturing and selling of fertilizers and other allied products and mining and selling of gypsum. (3) assessee claimed expenditure of Rs. 557970906 (1/5 of total VRS compensation of INR 2 789854531/ ) u/s 35DDA on account of VRS compensation but as per notes on accounts VRS compensation in respect of 364 employees amounting to INR 226,709,000 was not paid during year and was included in current liabilities. Therefore 1/5 of INR 226,709,000 amounting to INR 45,342,000 was required to be added back by assessee while disclosing its income for corresponding previous year. However, assessee omitted to do so. omission to do so resulted in incorrect allowance and carry forward loss of Rs. 453,42,000. I therefore have reason to believe that income of Rs. 45342000/ has escaped assessment within meaning of section 147 of income tax act, 1961 due to omission on part of assessee to include this sum into its income for relevant previous year. 5. Thus, after reopening of assessment and considering reply filed by assessee on 14/11/2008 learned assessing officer disallowed sum of Rs. 45342000/ and added that to los already determined u/s 143 (3) as per order dated 18/1/2006 of INR 3 352087581/ and net loss was assessed at INR 3 306745581/ as per order dated 18/12/2008 passed u/s 147 read with section 143 (3) of income tax act. 6. assessee aggrieved with order of learned assessing officer preferred appeal before learned CIT challenging same on aspect of reopening as well as on merits. learned CIT relying upon decision of honourable Delhi High Court in 31 taxmann.com 184 in CIT vs Maruti Suzuki India Ltd holding that assessing officer has examined complete account of assessee during original assessment proceedings and complete details of expenses were contained in notes to accounts and it to financial accounts. same is disturbed by learned assessing officer by initiating reassessment proceedings after expiry of 4 years where assessee has Page | 2 made primary facts available before assessing officer and therefore it cannot be held that assessee has failed to disclose fully and truly all material facts. Thus, reopening of assessment was quashed holding that it is mere change of opinion. learned CIT did not decide issue on merits of claim of assessee. 7. learned assessing officer aggrieved with order of learned CIT capital has preferred this appeal. learned departmental representative vehemently stated that reopening of assessment has been made by learned assessing officer on valid reasons. He referred to reasons recorded by learned CIT and stated that claim of assessee is incorrect. Therefore reopening of assessment is valid. 8. learned authorised representative reiterated submissions made before learned CIT and his order and stated that there is absence of tangible material, reopening has been made on appreciation of same facts which were available before assessing officer at time of original assessment, there is no failure on part of assessee to disclose fully and truly all material facts before assessing officer, therefore, reopening has been rightly quashed by learned CIT A. 9. We have carefully considered rival contention and perused orders of lower authorities. In present case reopening has been made after expiry of 4 years from end of relevant Assessment year by issuing notice u/s 147 of income tax act on 30/6/2008 whereas original assessment has been completed u/s 143 (3) on 18/1/2006 for assessment year 2003 04. Admittedly, thus assessment is reopened beyond 4 years of relevant assessment year. According to provisions of section 147 of income tax act there is specific condition which gives assessing officer power to reopen case beyond 4 years from end of assessment year unless income chargeable to tax has escaped assessment by reason of failure on part of assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year. Admittedly, in present case assessment was passed u/s 143 (3) of income tax act. In reasons recorded by learned assessing officer there is no mention that what information or material facts were not shown by assessee fully and truly to Page | 3 assessing officer during course of original assessment proceedings. Further learned CIT A, while quashing reassessment proceedings has relied upon decision of honourable Delhi High Court in case of CIT vs Maruti Suzuki India Ltd 31 taxmann.com 184, which was not controverted by learned departmental representative. Admittedly in this case there is no tangible material available with assessing officer, it is on perusal of same material available at time of original assessment, it is taking different view on same set of material which was available at time of original assessment, there is no mention in reason recorded by learned assessing officer what is failure on part of assessee for not disclosing fully and truly material facts before assessing officer. In view of this we do not find any infirmity in order of learned CIT in quashing reassessment proceedings, hence , we confirm his order. In result, ground number 1 of appeal of learned assessing officer is dismissed. 10. In result, appeal filed by learned assessing officer for assessment year 2003 04 in ITA number 3551/del/2016 is dismissed. Order pronounced in open court on 11/09/2019. -Sd/- -Sd/- (BHAVNESH SAINI) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 11/09/2019 K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Page | 4 ACIT, Circle-25(1), New Delhi v. Fertilizer Corporation of India Ltd