S E INVESTMENTS LTD Vs. ACIT

JUDGEMENT

(1.) IN this appeal, the assessee impugns an order of the Income Tax Appellate Tribunal (ITAT) ITA No. 1/Del/2008. The questions of law urged and pleaded for consideration are:

(2.) THE assessee is a Non-Banking Finance Company (NBFC), licensed by the Reserve Bank of India (RBI) and regulated by the provisions of law. The appellant had filed its return for the assessment year 2000-01, declaring net interest chargeable to tax amounting to Rs.75,530/-. The Assessing Officer (AO) sought to initiate reassessment proceedings under Section 10 of the Interest Tax Act, stating that he had reason to believe that the assessee had not brought to tax amounts under the enactment. The assessee objected through representation and letter dated 10.03.2006. The AO confirmed the order, directing that the amount of Rs. 3,10,82,350/- was in fact interest and not hire-purchase and, therefore, taxable under Section 2(7) of the Interest Tax Act. The assessee's appeal was considered by the Commissioner, who took into account the assessment proceedings which culminated in the order of ITAT for the previous years, wherein it was held that the assessment for the present year, by bringing to tax amount of Rs.3,09,86,822/- was justified under the circumstances.

(3.) THE appellate commissioner, on considering the records, held that the AO issued notice on 13.11.2003 under Section 10 and that despite its service upon the appellant, the latter did not file any return of income. The appellant, however, in a subsequent letter, took the position that it had already filed return on 30.09.2001. The appellate commissioner, therefore, concluded that the AO had issued notice under Section 10 on 13.11.2003, within four years of the end of assessment year 2000-01. The appellate commissioner also held that the information in possession of the AO was specific, direct and relevant that the interest chargeable to tax for the relevant assessment year 2000-01 had escaped assessment. The appellate commissioner relied on the decisions of the Supreme Court in ITO v. Saradbhai. M. Lakhani & Anr., (2000) 243 ITR 1 and Raymond Woollen Mills Ltd. v. ITO, (1999) 236 ITR 34. On these grounds, the appellate commissioner held that there was no infirmity in the reassessment proceedings which were validly initiated.