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2016 (5) TMI 546 - ITAT MUMBAIReopening of assessment - whether CIT(A) erred in holding that the proceeding u/s.147 as bad in law in spite of the fact that the set off of carried forward losses are not in existence as per section 72 of the Act for A.Y.1999-2000? - Held that:- The cojoint reading of all the documents goes to show that the assessee has disclosed fully and truly all material facts necessary for assessment, for that assessment year and as per the documents it is only the unabsorbed depreciation which has been adjusted out. Even otherwise as per settled position of law the reopening of an assessment u/s 147 has serious ramifications because the AO is empowered to reassess income even in respect of issues not set out in the notice. Therefore, if the power to rectify an order u/s 154(1) is adequate to meet a mistake or error in the order of assessment, the AO must take recourse to that power as opposed to the wider power to reopen the assessment. If the error can be rectified u/s 154, it would be arbitrary for the AO to reopen the entire assessment u/s 147. Further, the error in the order was not attributable to a fault or omission on the part of the assessee and the assessee cannot be penalized for a fault of the AO; Secondly when one or more modes of assessment or remedies are available to the taxing Authority, the Authority must adopt that remedy which causes least prejudice to the assessee. - Decides against revenue
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