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2020 (5) TMI 263 - HC - Income TaxReopening of assessment u/s 147 - Reliance on audit objections - deemed dividend addition u/s 2(22)(e) - HELD THAT:- It is obligatory on the part of the Assessing Officer to record reasons for the purpose of believing that the income had escaped assessment AND in the light of the judgment rendered by the Division Bench of Delhi High Court in United Electrical Co. P.Ltd. v. Commissioner of Income Tax and Others [2002 (10) TMI 86 - DELHI HIGH COURT] it is open to the Court to examine whether there was some material available for the Assessing Officer to form the requisite belief and further recorded a finding that even the Additional Commissioner had accorded approval for action under Section 147 of IT Act mechanically. Reasons recorded in the notice dated 31.03.2014 as to the income escaping assessment and the order of assessment dated 31.03.2015 passed under Section 143(3) r/w. Section 147 of the IT Act are unsustainable on facts as well on law. CIT (Appeals) has also ordered deletion on the ground that the provision of Sec.2(22)(e) of IT Act do not apply and the reasons for arriving such a conclusion is sustainable in law. The findings recorded by the ITAT, in the impugned common order as to the non-application of mind on the part of the Assessing Officer to apply his mind independently for the purpose of reopening of assessment is also sustainable for the reason that the very same official, namely Mr.S.Krishna Kumar, in response to the audit objection dated 31.01.2015, had taken into consideration all the materials placed and requested for dropping of the audit objection and therefore, passing of second order of assessment dated 31.03.2015 by him amounts to change of opinion on the very same set of facts. This Court, on an independent application of mind and on thorough consideration of material aspects and legal position, is of the considered view that there is no error or infirmity in the reasons assigned by the ITAT in dismissing the appeal filed by the Revenue - Decided in favour of assessee.
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