TMI Blog2010 (2) TMI 797X X X X Extracts X X X X X X X X Extracts X X X X ..... objection by the assessee is against the order of the Commissioner of Income-tax (A) in upholding the order passed by the Assessing Officer which according to the assessee is void-ab-initio as it is contrary to the provisions of law. According to the assessee, the provisions of Section.147 of the Act are not applicable as there is no income which escaped the assessment which came to the Assessing Officer's notice subsequently and, therefore, the reassessment order is liable to be cancelled. Without prejudice to the above, it is the submission of the assessee that the assessee has disclosed fully and truly all the material facts necessary for the assessment and the Assessing Officer was not in possession of any new information. On this ground also the reassessment proceedings are liable to be set aside. 3. Aggrieved by the order of reassessment, the assessee approached the first appellate authority and objected the validity of the very reopening itself. It is stated that subsequent to the passing of the assessment order the assessee received a notice u/s.263 on 13.3.1992 and on considering the assessee's objection to the notice u/s.263, proceedings were dropped by the CIT vide o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Selected Dalurband Coal Co. P. Ltd., (217 ITR 597). There must be relevant material before the Assessing Officer upon which he must reasonably and rationally form the belief. It is a subjective satisfaction. Assessee also relied on the decision of the Hon'ble Supreme Court in the case of Raymond Woollen Mills Ltd., vs. ITO and Others (236 ITR 34) for the said proposition. Sufficiency or insufficiency of the reason is not material, it was contended. While rejecting the assessee's contention with regard to jurisdiction, the Commissioner of Income-tax (Appeals) also relied on the following decisions: (i) Baba Abhai Singh vs. DCIT (253 ITR 93) (Delhi); and (ii) Dr. Amin's Pathology Laboratory vs. P. N. Prasad and Others (202 ITR 678) (Bom) While rejecting the assessee's contention Commissioner of Income-tax (Appeals) also held such a reason can be arrived based on the material available on record and need not be on the basis of certain information received after the assessment was completed. Aggrieved by the above order assessee is in appeal before the Tribunal. 4. The learned counsel for the assessee briefly submitted that the assessee filed return on 30.6.1987, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel challenged the order and submitted, the reopening of the assessment by the Assessing Officer is without jurisdiction and the Commissioner of Income-tax (Appeals) went wrong in confirming the same without applying the mind. The order is bad in law for the reasons that: (a) Reasons not furnished to the assessee till the assessment was completed. (b) The assessment is time barred; and (c) Reopening is based on change of opinion and no valid reason for reopening exists. 6. The learned counsel for the assessee submitted, the reasons were made available to the assessee only after completion of the assessment order. The counsel submitted that this does not amount to supplying the reasons to the assessee, because, the assessee could not defend properly. For the proposition he relied on the decision of the Tribunal in the case of Videsh Sanchar Nigam Ltd., Mumbai vs. JCIT in ITA.7626/Mum/2004, dt.30.10.2009, for the ay 1994-95. He particularly brought our attention to page 39 of the order where the issue is discussed. 7. Coming to the second point, i.e., dropping of the proceedings by the CIT and for the same reason the Assessing Officer cannot reopen th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not created during the previous year; and (iv) Profit of the Turbocharger Unit were not correctly calculated. 10. The counsel submitted relying on the decision of the Hon'ble Supreme Court in the case of Scientific Engineering House P. Ltd., vs. CIT (1986) 157 ITR 86 that in this case the Hon'ble Supreme Court held that the documentation services comprising of drawings, designs, plans, processing data etc., can be treated as "Book" and constitutes "Plant" and therefore, even if the assessee claimed there is nothing wrong. 11. Coming to section.43(B), the counsel submitted the issue is to be looked on the basis of pre-amended law and, therefore, the assessee's claim was in accordance with law. The submission of the assessee with regard to this point is as under: "As regards the deduction u/s.80HHB of Rs.6,33,658/-, we submit that we have created a reserve for an amount equivalent to 50% of the profit and gain from the projects outside India. It is further submitted that we have not only deducted from the Profit and Loss Account for the year under consideration for creating reserve but also transferred Rs.6,50,000/-from the general reserve to the foreign project res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der than section 263 and it cannot be compared with. Section 263 had been dropped by the CIT without giving any reasons. No reason is coming from the order of the CIT to drop the proceedings. There is no provision under the law to prevent initiating the proceedings u/s.147 even if the proceedings u/s.263 were dropped. 14. Opposing the argument of the assessee's Counsel that there is a change of opinion, the Standing Counsel for the department submitted this argument is not tenable because there was no 143(3) order. He relied on the decision of the Hon'ble Supreme Court in GKN Driveshaft (supra). When the CIT dropped the proceedings u/s.263 he has not formed any opinion. Satisfaction was not recorded. He submitted there is no need of a scientific reasoning for reopening. Satisfaction is sufficient, he submitted. 15. Replying to the above, the assessee's counsel submitted that the decision of the Madras High Court was cited for the reason that if the Assessing Officer does not like the view expressed by the CIT/Commissioner of Income-tax (Appeals), even then he cannot over look their view. In this case, the CIT dropped the proceedings holding that there is no escapement of in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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