Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (12) TMI 1858 - AT - Income TaxReopening of assessment u/s 147 - reason to believe - HELD THAT:- Nothing has been recorded by the AO in the ‘Reasons’ about any failure on the part of the assessee to disclose fully and truly all material facts necessary for the impugned assessment. It has nowhere been mentioned by him that which fact or material was not disclosed by the assessee. Thus, vital link between ‘Reasons’ and his findings has not been established by him. This vital link is the safeguard against arbitrary reopening of the concluded assessment. The ‘Reasons’ recorded cannot be supplemented by way of further observations in the assessment order or in any other manner. The validity of the reopening can be examined on the basis of ‘Reasons’ alone and not in supplementary material. Thus, taking into account all the facts and circumstances of the case, we find that the reopening has been done without complying with the mandatory jurisdictional condition precedent as stipulated in first proviso to section 147. Thus, reopening is invalid on this ground. Reopening as based upon change of opinion of the AO - deduction u/s 80IA available to the Mithapur power plant - HELD THAT:- Perusal of reasons recorded by the AO reveals that as per belief of the AO, deduction u/s 80IA available to the Mithapur power plant of the assessee was wrongly determined in the original assessment proceedings completed u/s 143(3) on 10-01-2005 for impugned assessment year i.e. AY 2002-03. As noted by us on the basis of information provided by both the parties to us that the year before us, i.e. A.Y 2002-03 is the second year of claiming the benefit of deduction u/s 80-IA on the income of new power plant located at Mithapur. The deduction was claimed for the first time in the year AY 2001-02. The assessment order was framed u/s 143(3) for AY 2001-02 vide order dated 29-03-2004 wherein the claim of the assessee was examined in detail and thereafter only the benefit of deduction was allowed after re-computing the same as was allowable to the assessee. It is clear that requisite material was obtained by the AO which was duly considered and only thereafter, the benefit of deduction was allowed to the assessee as was available in the assessment order passed u/s 143(3). Under these circumstances, it is not legally permissible to reopen the case merely reappraising same material and reviewing the decision already taken by the AO. It is well settled law that reopening based upon change of opinion of the AO is not permissible in the eyes of law. Thus, on this ground as well, the reopening has been rightly held as invalid by Ld. CIT(A). We would like to make reference to a recent judgment of Hon’ble Delhi High Court in the case of Principal CIT vs Samcor Glass Ltd [2015 (12) TMI 773 - DELHI HIGH COURT] wherein it was held by the Hon’ble High Court that where the reopening is done beyond 4 years and original assessment was done u/s 143(3) and yet, the ‘Reasons’ for reopening did not categorically state that there was failure by the assessee to disclose any material particulars on the basis of which there were reasons to believe that income had escaped assessment, then, the reopening would be without authority of law. We believe that concerned Chief Commissioners have already taken requisite steps under guidance from the CBDT to formulate and issue the requisite set of instructions to the AO so as to enable the AOs to reopen the cases only in desired and deserving cases so as to build up the faith of the taxpayers on the working of Income-tax department which will, in turn, increase voluntary compliance by the taxpayers. Decided against revenue.
|