Judgment:
All these appeals are disposed of together in a common order for the sake of convenience.
All these appeals are filed by the assessee against order of Commissioner (Appeals), Bhopal, dated 22-2-1995.
The first point of common dispute in against reopening the assessments under sections 147/148 of the Income Tax Act. The assessing officer had reopened the assessments on the ground that while completing the original assessments, the assessee was wrongly allowed deduction on account of interest on labour welfare fund and it has been allowed excess deduction of investment allowance inasmuch as investment allowance was wrongly allowed on well, tanks and trolley. It was submitted by the learned authorised representative of the assessee that in course of original assessments, the assessing officer had allowed these deductions after verifying the informations submitted by the assessee and after applying his mind. It was submitted that the assessee had furnished complete information about interest on labour welfare fund in the note below the computation of total income. The assessing officer had made further query on this issue in course of assessment proceedings and the assessee had furnished further clarification. As regards investment allowance, it was submitted that the assessee had given the complete details of the claim along with the return and the assessing officer had accepted the same after applying his mind. It was pointed out by the learned authorised representative of the assessee that the assessing officer took recourse to reopen the assessments on the issue of interest on labour welfare fund on the basis of information in assessment year 1986-87, in which the assessee had itself offered the interest on the advice of its tax advisor.
Similarly, it was pointed out that the assessing officer reopened the assessments on the issue of investment allowance on the basis of the appellate order of Commissioner (Appeals), dated 2-8-1989, for assessment years 1986-87 and 1987-88 and the order of the Tribunal dated 19-7-1991, for the assessment year 1986-87. It was argued that since the assessing officer had completed the assessments and had accepted the claims after verifying the details and after applying his mind, there was no justification for reopening the assessments. On the other hand, the learned Departmental Representative, relied on the order of the Commissioner (Appeals).
We have carefully considered the rival submissions and the facts of the case.
Perusal of records filed during the course of hearing shows that the assessee had given full particulars about its claim of interest on labour welfare fund and claim of investment allowance on well, tanks and trolley and the assessing officer had allowed the claims after applying his mind and after being satisfied with the correctness of the claims. Under the circumstances, we are of the view that there is no justification for reopening the assessment for the assessment years 1982-83, 1983-84 and 1984-85. Under the circumstances, the orders of Commissioner (Appeals) on this issue are set aside and the additions made are deleted.
In this assessment year, though assessment was reopened under section 147, no further addition was made. Therefore, the learned authorised representative of the assessee did not press the grounds of appeal.
Hence, the appeal is dismissed being infructuous.
The assessing officer in his order under section 143(3)/147 had made addition of Rs. 3,77,235 and Rs. 4,81,185 respectively in assessment years 1986-87 and 1987-88. The learned Commissioner (Appeals) upheld the orders of the assessing officer vide his order dated 28-2-1995.
During the course of hearing, the learned authorised representative of the assessee did not object to either the additions made or the merits of reopening under section 147. However, he made the claim under section 152(2) of the Income Tax Act and submitted that the additions should not be made. It was argued by him that in assessment years 1986-87, the assessees assessed income as per order under section 143(3)/250, dated 11-1-1994, was Rs. 1,10,62,246, whereas its profit as per audited accounts was Rs. 1,00,73,150. In view of this, it was argued that even if the escaped income of Rs. 3,77,235 is added to the profit as per audited accounts, its total income will not exceed the assessed figure of Rs. 1,10,62,246. Similarly, for assessment year 1987-88, it was pointed out that the assessees assessed income as per order under section 143(3)/250, dated 29-1-1993, was Rs. 58,69,979 whereas its latest assessed figure after appeal effect to order of Commissioner (Appeals) was Rs. 63,51,164. Thus, there was addition of Rs. 4,81,185. It was submitted by the learned authorised representative of the assessee that for this year, the assessee had filed its audited accounts which was not taken into cognizance, as it was furnished beyond time. It was further submitted that in this year, the assessee had claimed deduction of Rs. 6,20,000 under section 32AB. But the same was not allowed, since the assessee had not filed the audited accounts.
Since the audited accounts were filed subsequently, at least deduction to the extent of disallowance made i.e. Rs. 4,81,185 should be allowed.
The learned Departmental Representative strongly objected to the fresh claim made by the learned authorised representative of the assessee under section 152 of the Income Tax Act, which was never made before the assessing officer. He also submitted that the income shown in the audited report cannot be treated as income rightly liable to tax and relief under section 152(2) cannot be given. He also submitted with specified reference to assessment year 1987-88 that on the plea of making claim under section 152(2), the assessee cannot agitate an issue which had reached its finality. It was further submitted that during the original assessment for assessment year 1987-88, the claim under section 32AB was disallowed, as the assessee had not fulfilled the required conditions. Hence, the issue had become final. Now that cannot be reconsidered on the basis of audit report which was filed much later. It was also argued that such reopening of issue is prohibited under the proviso to section 152(2).
We have carefully considered the rival submissions and the facts of the case. Under the provisions of section 152(2), an assessee may put forth a claim for dropping the reassessment proceedings under section 147/148 on the ground that though income might have escaped as alleged by the assessing officer, he was overassessed in respect of certain other incomes and that such amount of overassessment should be adjusted against the income escaped. The assessee has to show that he had been assessed on an amount or to a sum not lower than what he would rightly be liable for even if the income alleged to have escaped assessment be taken into account. We find that this issue was never raised before the assessing officer. However, it was raised before the Commissioner (Appeals) but he rejected the claim of relief as the assessee had nothing substantial to say with regard to the claim. He had also raised the claim of deduction under section 32AB before the Commissioner (Appeals), who rejected this claim too. After considering the facts, we agree with the view of the learned Departmental Representative that for purposes of section 152(2) the income worked out in audit report cannot be taken as income rightly liable. The learned authorised representative has not established that the assessee was overassessed or was assessed at a higher income that could be said to be correct income. We are also of the view that under the plea of claim under section 152(2), the assessee is trying to take up the issue of deduction under section 32AB in assessment year 1987-88, which has already reached its finality. Such action is not permissible under the provisions of proviso to section 152(2) and hence, cannot be accepted.
Under the circumstances, we reject the claim of the assessee seeking relief under section 152(2).
In the result, appeals for the assessment years 1982-83, 1983-84 and 1984-85 are allowed and appeals for 1985-86, 1986-87 and 1987-88 are dismissed.
In these appeals, the revenue has challenged the direction of the learned Commissioner (Appeals) to start computation from the figures arrived at after giving effect to orders of Commissioner (Appeals) and Tribunal in his assessment order under section 143(3)/147, the assessing officer has stated the computation from the figure of total income originally assessed and not from the figures arrived at after giving effect to the orders of Commissioner (Appeals) and the Tribunal.
Against this, the assessee has preferred appeal and the learned Commissioner (Appeals) directed to start computation from the figures arrived at after giving effect to orders of Commissioner (Appeals) and Tribunal. The revenue has filed these appeals against this finding of the Commissioner (Appeals).
During the course of hearing, the learned Departmental Representative relied on the orders of the assessing officer, whereas the learned authorised representative of the assessee relied on the order of the Commissioner (Appeals).
We have considered the submissions and have perused the order of the Commissioner (Appeals) and the same is upheld.