The Tax Publishers2020 TaxPub(DT) 0152 (Mad-HC) : (2020) 422 ITR 0417 : (2020) 317 CTR 0468 : (2020) 269 TAXMAN 0610

INCOME TAX ACT, 1961

Section 147

It was not case of revenue that reassessment proceedings were initiated after amendment of law. The same were admittedly initiated on 31-3-2008, and as on that date, judgment of the Supreme Court in the case of HCL Comnet Systems & Services Ltd., which was delivered on 23-9-2008, was holding the field. Therefore, issue raised by AO was not at all in issue, when reassessment notice for assessment year 2003-04 was issued on 31-3-2008 for disallowing 'provision for bad and doubtful debts'. Merely because law came to be amended in 2009, when such reassessment proceedings were pending before AO, AO could not be held justified retrospectively in issuing reassessment notice on 31-3-2008.

Reassessment - Validity - Issuance of section 148 notice on 31-3-2008 to disallow amendment to Expln. (1) to section 115JB brought by Finance (No. 2) Act, 2009 with retrospective effect from 1-4-2001 -

AO issued notice under section 148 on 31-3-2008 so as to disallow 'provision for bad and doubtful debts' for the purpose of computing book profits under section 115JB for the concerned assessment year 2003-04 in view of amendment to Expln. (1) to section 115JB broght by Finance (No.2) Act, 2009 with retrospective effect from 1-4-2001. Tribunal considering judgment of Supreme Court in the case of CIT v. HCL Comnet Systems & Services Ltd. (2008) 305 ITR 409 (SC) : 2008 TaxPub(DT) 2312 (SC) cancelled consequent reassessment order as bad-in-law. Revenue challenged this by way of appeal before High Court. Held: It was not case of the revenue that reassessment proceedings were initiated after amendment of law. The same were admittedly initiated on 31-3-2008, and as on that date, judgment of the Supreme Court in the case of HCL Comnet Systems & Services Ltd., which was delivered on 23-9-2008, was holding the field. Therefore, issue raised by AO was not at all in issue, when reassessment notice for assessment year 2003-04 was issued on 31-3-2008 for disallowing 'provision for bad and doubtful debts'. Merely because law came to be amended in 2009, when such reassessment proceedings were pending before AO, AO could not be held justified retrospectively in issuing reassessment notice on 31-3-2008.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2003-04

IN THE MADRAS HIGH COURT

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