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2022 (7) TMI 745 - AT - Income TaxReopening of assessment u/s 147 - set off of brought forward of loss was sought to be withdrawn in the reopened proceedings - Addition on protective basis - assessee pleaded that the additions made in the hands of the assessee for Asst Years 2009-10 and 2010-11 were only on protective basis and hence the brought forward losses could not be set off against the business income assessed on protective basis - HELD THAT:- We hold that though there may not be apparent failure on the part of the assessee in making full and true disclosure of facts at the time of filing of return, there was certainly failure on the part of the assessee in not bringing to the knowledge of the ld. AO during the course of scrutiny assessment proceedings of Asst Year 2011-12, about the assessments of Asst Years 2009-10 and 2010-11 getting completed with huge positive income in the hands of the assessee, though on protective basis. Atleast, AO suo moto should have brought to the attention of the ld. AO in the course of original scrutiny assessment proceedings for the Asst Year 2011-12 that though he has claimed set off of brought forward loss, but the same would not be eligible in the absence of the said loss. Hence we hold that there was failure on the part of the assessee to make full and true disclosure of facts that are material for the completion of original assessment. Moreover, the reopening has been done in the instant case to address the mistake of fact – rectifying the mistake of allowing wrong set off of brought forward losses which was not available with the assessee company in Asst Year 2011-12. Hence the ratio laid down in the case of PVS Beedies [1997 (10) TMI 5 - SUPREME COURT] would squarely come to the rescue of the revenue in the instant case. We hold that the reopening has been done properly in the instant case and the ld. CIT(A) ought not to have quashed the reassessment as void abinitio. Accordingly, the Grounds raised by the revenue challenging the quashing of reassessment by the ld. CIT(A) are allowed. Appeals against the substantive additions framed in the hands of some other assessee are pending disposal before the ld. CIT(A) - We find that the ld. CIT(A) had not adjudicated the issue of set off brought forward losses against the current year’s income and further allowing the remaining loss to be carried forward, ON MERITS. We find that no opinion is given by the ld. CIT(A) on merits of the issue in dispute before us. Hence we deem it fit and appropriate, in the interest of justice and fair play, to remand this issue to the file of ld. CIT(A) for denovo adjudication of the issue on merits and also tag this appeal with the appeals of the assessee where substantive additions were made , so that a cogent and cohesive decision could be taken in this regard. This, in our considered opinion, would meet the ends of justice for both the parties. Accordingly, the ground raised by the revenue on merits is allowed for statistical purposes.
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