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2019 (5) TMI 1800 - AT - Income TaxReopening of assessment u/s 147 - loss created by misusing client's code modification - HELD THAT:- AO while invoking his jurisdiction to reopen the completed assessment recorded in the reasons recorded the issue of production/suppression of iron ore by the assessee as the reason for escapement of income was for reopening the completed assessment. AO has not made any addition or disallowance on this specific issue (i.e. for production/suppression of iron ore) on the basis of which reopening was initiated. According to the Ld AR, the AO could not have proceeded to make any other addition, without making any addition/disallowance on the issue for which he based his belief in respect of the escapement of income, and for which he resorted to re-opening. There is no whisper about the escapement of income i.e. loss created by misusing client's code modification has been mentioned in the reasons for reopening conveyed to the assessee vide letter dated 19.03.2015 no addition in respect of this can be made without making any addition in respect to the item shown to have been escaped assessment in the reasons recorded by ibid letter dated 19.03.2015. During reassessment when the AO finds that the item on the basis of which he reopened does not survive, then the reasons recorded to reopen loses its significance and the fall out is that the AO's jurisdiction to reassess is without jurisdiction and therefore is illegal and fragile in the eyes of law Thereafter he should have dropped the reassessment proceeding there only as discussed supra. Therefore, after having no jurisdiction to reassess his further action of a new fact finding in the absence of any item specified in the reasons recorded which is the foundation on which he reopens when no longer subsists, the AO's action is hit being 'Quarum non-judice' and, therefore, the impugned addition is non-est in the eyes of law and so it has to necessarily go. Therefore, the appeal of the Revenue is devoid of any merits - Decided in favour of assessee.
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