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TMI Blog2014 (1) TMI 1128X X X X Extracts X X X X X X X X Extracts X X X X ..... acts and in the circumstances of the case, the CIT (A) has erred in law by deleting the disallowance of Rs.3,69,972/- made by the A.O. on account of short term capital loss without appreciating full facts of the case. 3. On the facts and in the circumstances of the case, the CIT (A) has erred in law by deleting the addition of Rs.96,065/- made by the A.O. on account of unpaid liability under section 43B without appreciating full fact of the case." 2. The assessee has filed an application under Rule 27 of the ITAT Rules, which reads as follows:- "Sub: Application under Rule 27. Sir, In the above noted appeal which is filed by the Revenue, the Respondent desire to support the order of the CIT (A) by way of following grounds:- 1. That the notice u/s 148 r.w.s. 147 issued by the A.O. is illegal, barred by limitation and without jurisdiction. 2. That on the facts and circumstances of the case the A.O. has erred in passing the order under section 147 and the said order illegal and bad in law. 3. That the proceedings u/s 147/148 has been initiated on wrong facts and therefore the re-assessment proceedings were invalid, unjustified and not maintainable in the facts and circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer in the original assessment proceedings, as required by the Assessing Officer, along with reply dated 25.10.2006; that it was after having gone through the details so filed and being satisfied with them, that the Assessing Officer had completed the assessment, accepting the share application money as genuine; that specific details were asked for by the Assessing Officer during the original assessment proceedings, it was in response to which that the assessee had filed all the details, i.e., copies of account along with draft details, PAN No. and IT returns; that these details were found genuine by the Assessing Officer even in the face of the information from the Investigation Wing of the department, as available with the Assessing Officer; and that from this, it is amply clear that it was a mere change of opinion that prompted the Assessing Officer to reopen the completed assessment, which is not permitted under the law. The ld. Counsel for the assessee has placed reliance on the following case laws:- i) 'CIT vs. Kelvinator India Ltd.', 256 ITR 1 (FB) (Del); ii) 'CIT vs. Kelvinator India Ltd. & Anr.', 320 ITR 561 (SC); iii) 'Haryana Acrylic Pvt. Ltd. vs. CIT', 308 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee is entitled, under the said Rule to support the CIT (A)'s order on any of the grounds decided against him. Now, the assessee's challenge to the reopening of the completed assessment was decided by the Ld. CIT (A) against the assessee, as noted above. Therefore, under Rule 27 of the ITAT Rules, the assessee is entitled to rake up this issue at this stage before us. In 'Jamnadas Virji' (supra), the CIT (A) had allowed the assessee's appeal in part, deleting the disallowance to the extent of Rs. 13.73 lacs and confirming the disallowance to the extent of Rs. 14.96 lacs. Before the Tribunal, the assessee's appeal was withdrawn, perhaps because it was barred by limitation. On an application filed by the assessee under Rule 27 of the ITAT Rules, the Tribunal set aside the CIT (A)'s order in its entirety. The Hon'ble High Court held that once the appeal had been withdrawn, it is only open to the assessee to support the CIT (A)'s order on any of the grounds decided against him and so, the assessee was entitled to urge that the deletion of the disallowance to the extent of Rs. 13.73 lacs by the CIT (A) was correct and proper, but the assessee would not be entitled to avail th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded do not have any link, much less any live link with the formation of belief of escapement of income. The reopening of the completed assessment, in view of the full disclosure of the material facts relevant to the assessment of the assessee for Assessment Year 2004-05, was nothing other than a mere change of opinion, which is impermissible in law. 12. In view of the above, we hold that the application filed by the assessee under Rule 27 of the ITAT Rules is, by all means, maintainable. 13. Now, so far as regards the merits of the contents of the application filed by the assessee, the legal position as per the proviso to Section 147 of the Act is that where an assessment u/s 143 (3) has been made for the relevant Assessment Year, no action shall be taken u/s 147 after the expiry of four years from the end of the relevant Assessment Year, unless any income chargeable to tax has escaped assessment for such Assessment Year by reason of the failure on the part of the assessee, inter alia, to disclose fully and truly all material facts necessary for his assessment, for that Assessment Year. 14. In the present case, as per the record, the assessee company is engaged in the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Beneficiary Name M/s Barnala Steel Industries Ltd., Meerut Road, M. Nagar. 3. Beneficiary Bank Name SBI M. Nagar 4. Beneficiary Bank Branch Railway Road, M. Nagar 5. Value of Entry Rs.5,01,250/- + 5,01,250/- 6. Instrument Number by which Draft No.544065 & 544066 Entry Received issued by Jai Luxmi Cooperative Bank Ltd. 7. Date on which Entry received 4.12.2003 8. Name of a/c holder of entry Deepak Gupta giving account 9. Entry operator's bank name Jailaxmi Coop. Bank 10. Entry operator's bank branch Fateh Puri Delhi 11. Account No. of entry giving 15942 account On going through the Bank account of the assessee it has been revealed that the amount of this entry has been credited, but the assessee has not reflected them either in the form of loan/deposit or as any advance in the name of Shri Deepak Gupta, in the Balance Sheet. Enquiries made by Inspector reveal that Shri Deepak Gupta is not available at the address given in the Bank account i.e. 1756 Nai Basti Naya Bazar, Delhi. During the assessment proceeding completed on 22.12.2007, when the assessee Company was confronted in respect of these entries, the assessee Co. vide letter dated 20.12.2006 stated "1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onds Woollen Mills' (supra) is not at all applicable to the facts of the present case. Therein, it was held that in determining whether commencement of re-assessment proceedings was valid, it has only to be seen whether there was prima facie some material on the basis of which the department could re-open the case and that the sufficiency or correctness of the material is not a thing to be considered at this stage. The issue of coming into play of the provisions of the Section 147 of the Act was not up for consideration before the Hon'ble Supreme Court in that case.
19. 'Rajesh Zaveri' (supra) was concerned with an assessment completed u/s 143 (1) of the Act, which is not the case herein. Therefore, 'Rajesh Zaveri' (supra) also does not aid the case of the department.
20. In view of the above, the application filed by the assessee is allowed and as such, the order passed by the Ld. CIT (A) is maintained. This being so, the grounds raised by the department are not required to be gone into.
21. In the result, the appeal filed by the department is dismissed and the application filed by the assessee is allowed.
The order pronounced in the open court on 05.12.2013. X X X X Extracts X X X X X X X X Extracts X X X X
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