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2022 (1) TMI 652 - KARNATAKA HIGH COURTValidity of Reopening of assessment u/s 147 - Entitlement to exemption u/s 80P(2) - change of opinion - appellant/assessee is a Co-operative Society governed by the Karnataka Cooperative Societies Act, 1959 and is engaged in the business of banking providing loans and advances to its needy members and similarly collects deposits only from its members and pays interest only to its members - HELD THAT:- What could be gathered is that the assessing officer had no independent reason to believe that the deduction claimed by the assessee under Section 80P(2) being the profit on sale of securities was not allowable, as the same has to be charged under the head “Capital Gain” and is not a gain from the banking business. This would clearly establish that there was no independent application of mind by the Assessing Officer. Indeed the assessing officer objected to the audit objection in giving a reply to the same. On the other hand, the assessing officer was of the firm opinion that the assessment concluded under Section 143(3) of the Act was passed in consonance with various judicial pronouncements and there is no escapement of income. In the case of P.C.Patel & Co. v. Dy.CIT [2015 (8) TMI 722 - GUJARAT HIGH COURT]as held that any reassessment proceedings initiated at the instance of audit party objection, without the assessing officer himself has reason to believe that the income chargeable to tax having escaped the assessment, must fail. This is the view expressed by the Coordinate Bench of this Court in the case of Commissioner of Income-tax v. GMR Holdings (P) Ltd., [2018 (9) TMI 353 - HIGH COURT OF KARNATAKA AT BANGLORE]. Thus on the ground of change of opinion the substantial question of law raised herein require to be answered in favour of the assessee and against the revenue.
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