M/s. Tamilnad Mercantile Bank Ltd. v. The ACIT

Parties Involved

Facts Summary

The assessee, M/s. Tamilnad Mercantile Bank Ltd., filed its return of income for the Assessment Year 2010-11 on 20.09.2010, admitting an income of ₹248,57,34,777/-. The return was processed under section 143(1) of the Income Tax Act, 1961, and subsequently selected for scrutiny. The Assessing Officer (AO) accepted the income returned by the assessee and passed an assessment order dated 17.03.2013 under section 143(3) of the Act. However, the AO re-opened the assessment on 28.03.2016 under section 148 of the Act, citing the reason that the assessee had claimed a deduction under section 36(1)(viia) of the Act amounting to Rs.22,11,49,678/- in respect of advances relating to Rural and Non-Rural branches, which was not fully eligible as per the Supreme Court's decision in M/s.Catholic Syrian Bank. The assessee challenged the re-opening of the assessment, arguing that the AO did not have the jurisdiction to re-open the assessment after four years without satisfying the condition precedent under section 147 of the Act. The Commissioner of Income Tax (Appeals) upheld the AO's action, which was further challenged by the assessee before the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the AO had the jurisdiction to re-open the assessment after four years without satisfying the condition precedent under section 147 of the Act?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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