[Income Tax] Assessing Authority Can't Reassess Prior Years Without Inquiry While Determining Relevant Year's Assessment: Kerala High Court
Live LawThe Kerala High Court stated that while determining the assessment of relevant years assessing authority cannot determine the assessment for earlier years without enquiry. observed that “…….we fail to understand how the assessing authority, as well as the First Appellate Authority, while considering assessment proceedings for the assessment years 2011-12 could have embarked upon an enquiry with regard to the nature and extent of business that was carried on by the assessee during the assessment years from 1999- 2000 to 2009-10…….” The assessee/appellant, filed a nil income tax return for the 2011-12 assessment year, claiming a carried-forward loss of ₹1,52,76,459, which included unabsorbed depreciation from prior years. The bench noted that the findings of First Appellate Authority virtually tantamount to reopening the assessments for the assessment years 1999-2000 to 2009-10 without even going into the issue as to whether or not the claim for depreciation, as also set-off of unabsorbed depreciation, made by the assessee in its returns filed during the said years were accepted by the department or not. The bench further stated that “we fail to understand how the assessing authority, as well as the First Appellate Authority, while considering assessment proceedings for the assessment years 2011-12 could have embarked upon an enquiry with regard to the nature and extent of business that was carried on by the appellant during the assessment years from 1999-2000 to 2009-10.” Without determining the fate of the assessments made on the assessee during the assessment years 1999-2000 to 2009-10, the issue of allowance of a claim for depreciation on a claim for set-off of unabsorbed depreciation of earlier years could not have been gone into, or any directions given in regard thereto, by the First Appellate Authority, added the bench.