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2013 (5) TMI 284 - HC - Income TaxReopening of assessee - commission paid to the three working directors was in lieu of dividend and the same is not allowable - assessee contested that re-opening was made on the ground that the facts for AY 2006-07 were similar to the relevant AY 2008-09, which is not correct as in AY 2006-07 no dividend was declared - Held that:- Assessment in the instant case was re-opened on the ground that the Special Bench of the Tribunal [2011 (6) TMI 251 - ITAT, Mumbai] in the assessee's own case for AY 2006-07 had reversed the earlier decision of the Tribunal in the assessee's case for AY 2005-06 whereby the Special Bench held that the commission to the three Directors was in lieu of dividend and the same was not allowable as deduction under Section 36(1)(ii). The Special Bench [2011 (6) TMI 251 - ITAT, Mumbai] confirmed the treatment of the commission under Section 36(1)(ii) and held that the provisions of Section 37(1) are not applicable. In the circumstances, considering the principles enunciated in the judgments referred to above, the re-opening of the assessment in the present case on the basis of the subsequent decision cannot be said to be a mere change of opinion. Contention of the Petitioner that the succeeding AO could not have issued the notice dated 1 October 2012 u/s 148, as it was his predecessor who has recorded the reasons for reopening is completely misconceived. The reasons recorded for re-opening and the notice dated 1 June 2012 which has been issued u/s 148 for reopening are as a matter of fact by the same AO. The notice dated 1 October 2012 issued by the succeeding AO was merely a notice fixing the hearing. Section 129 envisages such a situation and lays down that whenever in respect of any proceeding under the Act an income-tax authority ceases to exercise jurisdiction and is succeeded by another who has and exercises jurisdiction, the income-tax authority so succeeding may continue the proceeding from the stage at which the proceeding was left by his predecessor - reopening was valid - against assessee.
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