TMI Blog2014 (11) TMI 681X X X X Extracts X X X X X X X X Extracts X X X X ..... caped assessment - Only on reappraisal of the materials available and considered at the time of original assessment and which were also examined during original assessment, AO has reopened assessment u/s 147 of the Act. AO himself has expressed the fact that on review he has noted assessee has claimed deduction in the P&L Account towards prior period and exceptional items, which is not relatable to current year - an issue which has already been considered and decided in original assessment cannot be subjected to reopening u/s 147 as it will amount to review of earlier assessment order – in CIT Vs. Kelvinator India Ltd. [2010 (1) TMI 11 - SUPREME COURT OF INDIA] the scope of section 147 had been discussed in details – here AO has completed original assessment after making due enquiry and proper application of mind on the issue on which assessment was reopened - Only because AO has accepted the deduction claimed towards prior period and exceptional items without making any reference, it cannot be said that the issue was not examined by AO - reopening would amount to change of opinion or a review of assessment order earlier passed which is not permissible in law – the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closed all material facts relating to the expenditure claimed including prior period items and AO after conducting due enquiry and after proper examination of facts and materials on record and applying his mind has completed assessment u/s 143(3) of the Act. Hence, reopening of assessment on the very same issue and reappraisal of the very same material, which were considered at the time of original assessment, will amount to a change of opinion. Ld. CIT(A) after considering the submissions of assessee and examining the facts and materials on record found that deduction claimed of prior period items was not only enquired into by AO at the time of original assessment, but, assessee has also disclosed full particulars about the prior period and exceptional items and AO after verifying the informations submitted by assessee has completed assessment. Ld. CIT(A) further noted the fact that the reasons recorded by AO for reopening of assessment clearly disclosed that only on review of materials already available on record and considered in the original assessment, AO has reopened the assessment. Ld. CIT(A), therefore, following the decision of Hon ble Supreme Court in case of CIT Vs. Kelv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has furnished all details regarding the prior period and exceptional items in the final accounts as well as return of income, but, AO at the time of original assessment has made necessary enquiry and examined assessee s claim with regard to prior period and exceptional items. Only after applying his mind to the facts and materials, AO has completed assessment and in fact disallowed a part of the expenditure from the prior period items. Therefore, as AO has examined the issue relating to prior period items, assessment cannot be reopened on the very same issue and material which was considered at the time of original assessment as it will amount to change of opinion. Ld. AR submitted that reasons recorded itself shows that on review of earlier assessment order and record AO has formed belief that income has escaped assessment. Ld. AR submitted that law is well settled that order passed earlier cannot be reviewed by resorting to section 147. In support of his contention, learned AR relied on the following decisions: 1. CIT Vs. Kelvinator India Ltd., 320 ITR 561 2. Usha International Ltd., 348 ITR 485 6. We have considered the submissions of the parties and perused the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total 2029.22 B. Exceptional Items - Income from out of court settlement (669.42) C.Deferred tax credit thereon (386.00) Total (973.80) 6.1 As can be seen from the reasons recorded, assessment has been reopened on the allegation that assessee has claimed deduction of prior period and exceptional items amounting to ₹ 9,73,80,000, which does not relate to assessment year under consideration, hence, cannot be allowed. However, in this context, it is necessary to see whether this issue was examined by AO at the time of original assessment and whether assessee has disclosed the material facts relating to the prior period and exceptional items. As can be seen from the facts discussed by ld. CIT(A) in paras 5.4. and 5.4.1 of his order, not only assessee has disclosed full particulars with regard to prior period and exceptional items in its final accounts, but, explanatory notes was also appended with the final accounts with regard to such claim. It is also clear that AO at the time of original assessment has enquired into this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. Kelvinator India (supra) held as under: 39. In view of the above observations we must add one caveat. There may be cases where the Assessing Officer does not and may not raise any written query but still the Assessing Officer in the first round/ original proceedings may have examined the subject matter, claim etc, because the aspect or question may be too apparent and obvious. To hold that the assessing officer in the first round did not examine the question or subject matter and form an opinion, would be contrary and opposed to normal human conduct. Such cases have to be examined individually. Some matters may require examination of the assessment order or queries raised by the Assessing Officer and answers given by the assessee but in others cases, a deeper scrutiny or examination may be necessary. The stand of the Revenue and the assessee would be relevant. Several aspects including papers filed and submitted with the return and during the original proceedings are relevant and material. Sometimes application of mind and formation of opinion can be ascertained and gathered even when no specific question or query in writing had been raised by the Assessing Officer. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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