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2019 (3) TMI 589 - BOMBAY HIGH COURTReopening of assessment - notice issued beyond a period of four years from the end of the relevant Assessment Year - claim for allowing the deduction for interests on late deposit of TDS - addition u/s 37 or 40(a)(ii) - HELD THAT:- In the present case, we have recorded that, the assessee had raised the claim and also put-forth the grounds for justifying the same. Thus, there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. In the reasons recorded, the Assessing Officer had neither alleged nor such reasons in any other manner demonstrate any such failure on the part of the assessee. Only on this ground, the impugned notice needs to be set aside. Also the impugned notice cannot be sustained. During the scrutiny assessment, this issue had came up for discussion before the Assessing Officer as can be gathered from documents on record. In a communication dated 14th January, 2014, assessee had supplied several details as called for by the Assessing Officer. In said letter, while justifying the claim for allowing the deduction for interests on late deposit of TDS, the assessee had asserted this amount is compensatory in nature and not penal in nature and accordingly is not covered by Explanation to section 37(1). Further, this amount is not in the nature of tax levied on profits of business or profession and so not covered by section 40(a)(ii). This amount cannot be disallowed under section 37(1) or section 40(a)(ii). Clearly, thus this claim of the assessee had came up for examination by the Assessing Officer during original assessment proceedings. Once, this much is established, as per settled law it is simply open for the AO to reopen assessment which would be based on mere change of opinion. Without their being any additional material outside of the assessment records, once a particular issue has been scrutinized during original assessment, reopening of assessment based on such issue, would be wholly impermissible. For such reasons, the impugned notice is set aside. - Decided in favour of assessee.
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