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2016 (9) TMI 1529 - HC - Income TaxReopening of assessment u/s 148 - TDS on interest of payment was not deducted under Section 194A and it was disallowable under Section 40(a) - HELD THAT:- When we go through various reasons in respect to orders dated 08.01.2016, passed in all A.Ys. except 2009-10, we find that there is either a statement of fact as to what has been disclosed by YEIDA in Returns submitted by it and documents appended thereto or there is guesswork that either TDS was deductable and if not deducted, then there is default which has to be verified. This in itself shows that authority concerned has no subsequent material to form opinion but it is factual guesswork or conjectures on the part of authority concerned so as to include and make it part of reasons to justify reassessment under Section 147/148 of Act 1961. The reasons communicated to YEIDA, we have already quoted in respect to A.Y's. 2010-11, 2011-12, 2012-13 and 2013-14. One of the ground is that Sundry Creditors have decreased and it needs verification. This is a fact disclosed by Assessee in the Returns and it was always open to the Assessing Officer to verify it at the stage of regular proceedings. If in the regular proceedings, Assessing Officer did not find any reason for verification what prompted it or made it obligatory to make verification now, is not clear and this ground in our view is nothing but change of process of opinion, not even a complete change of opinion, and cannot be justified to be a valid ground for reassessment unless there is something further to show that material was available before Assessing Authority so as to cause reason to believe that something has escaped assessment. There are several conditions under Section 194 A, 194 C and 194 J, and thereunder whether the TDS was actually deductable or not is a matter of investigation and inquiry. But it was always open to make this inquiry in regular proceedings when disclosure of payment under various heads as noted above was already there in the Income and Expenditure Account and Balancesheet of YEIDA. But when Assessing Authority did not find any justification to make verification at that stage, for change of opinion now, in our view Sections 147/148 would not be attracted. YEIDA claimed depreciation on electrical equipment at the rate of 15% instead of 10%, which is prima facie inadmissible, is also unsustainable for the reason that it is a clear case of change of opinion. Assessee at the time of filing Return was not found incorrect but now a different opinion is being formed that depreciation should be lesser than that actually claimed. In order dated 10.08.2016, height of non application of mind is evident from the fact that Assessing Authority while rejecting objection has observed that here is a case of seizure operation though admittedly there was no search and seizure matter. This clearly shows that while passing order dated 10.08.2016, competent authority did not care even to go through relevant record and apply its mind. When confronted, learned Additional Solicitor General has nothing to offer except his regret accepting that here is a clear case of non application of mind on the part of authority concerned. So called reasons mentioned by authority concerned, for all Assessment Years in question, for justifying reassessment proceedings under Section 147/148 of Act 1961, are illegal, showing non application of mind and an arbitrary exercise on the part of authority concerned. The writ petitions are allowed to the extent of notices issued by authority concerned under Section 148 and orders rejecting objection filed by petitioner against reassessment under Section 147/148 of Act 1961, are hereby quashed. - Decided in favour of assessee.
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