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2017 (11) TMI 681 - HC - Income TaxRe-opening of assessment - reopening of assessment on the ground that the same was prompted by audit objection - ITAT quashing reopening orders - Held that:- Audit note dated 24.06.2010 pointing out that the assessee was engaged in the business of manufacturing ceramic tiles. The assessee had incurred a sum of ₹ 19,99,107/- of prior period expenses but added only ₹ 8,18,923/- out of this sum instead of the entire sum of ₹ 19,99,107/-. The Assessing Officer responded to such audit objection in letter dated 10.02.2011 conveying that he does not agree to such audit objection since according to him the expenditure had actually crystallized during the year under consideration and therefore rightly allowed. He concluded that such objection may therefore be dropped. Despite this, he eventually issued the notice for reopening by recording reasons which only referred to this discrepancy. We also have further letter dated 30.12.2011 of the Assessing Officer to the Accountant General reiterating that the audit objection was not acceptable despite which reassessment was framed. It can thus be seen that all along the Assessing Officer was under compulsion to act according to the point of view of the audit party although he himself did not agree with such view point. From the stage of reassessment till the reopening of assessment he had acted only mechanically, perhaps in compulsion - Decided against revenue.
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