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TMI Blog2014 (2) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... income of Rs. 6,93,59,402/-. Accordingly, the assessment order was completed u/s 143(3)/263 and order dated 31.12.2007 was passed by making a disallowance of Rs. 6,21,46,028/- u/s 14A of the Income Tax Act, 1961. Later on Addl. CIT, Range-X, New Delhi after recording reasons for initiation of proceedings u/s 148 reopened the case of assessee by recording the following reasons:- "It has been noticed that income from house property in respect of Shri Ram School has been declared in the P&L A/c whereas the said immovable property is not reflected as an asset either fixed asset or current in the audited balance sheet of the company. As against the gross rental income of Rs. 24,68,000/- the assessee has also claimed deduction @ 30% under sec. 24 of the IT Act in respect of income from house property from Shri Ram School. The fact was accepted by the assessee during the course of assessment proceedings for assessment year 2006-07 u/s 142(2A) of IT ACT that the rent was received from Shri Ram School in terms of agreement dated 27.12.2000 for operation and running the Shri Ram School- Aravali. The said amount was shown as income under the head "Income from house property". I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has itself not been upheld the order of the Assessing Officer arising out of the order passed by the CIT was treated as invalid by the CIT(A) vide his order dated 27.1.2009. However, it is pertinent to note that with regard to the issue of disallowance u/s 14A of the IT Act the CBDT has issued Rule 8D in March 2008 with retrospective effect. In view of these observations the income earned by the assessee firm dividend has been disclosed and no expenditure u/s 14A of IT Act has been added back as per Rule 8D of IT Rules. I have therefore, reasons to believe that the income chargeable to tax has escaped assessment for the assessment year 2002- 03. Hence approval may kindly be given as per section 151(1) of IT Act as the assessment year in question is beyond four years and the assessment has been completed u/s 143(3) of the IT Act." 3. During assessment proceedings u/s 148, the Assessing Officer on the one hand disallowed an amount of Rs. 24,68,000/- which was claimed as business expenditure and on the other hand rejected the claim of the assessee regarding income from house property and shifted the income of Rs. 24,68,000/- from income from house property to income from other source ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arious judicial pronouncements relied upon by the appellant on the issue of reopening u/s 147 of the IT Act. In this case original assessment u/s 143(3) was passed on 31.3.2005 determining the total income at Rs. 13,91,01,268/-. Therefore, assessment order was set aside by the CIT-IV, New Delhi vide its order dated 15.3.2007 as assessment was treated as erroneous and prejudicial to the interest of revenue. The Assessment u/s 143(3) r.w.s. 263 was passed on 31.12.2007 determining total income at Rs. 17,12,55,256/- after making disallowance of Rs. 6,21,46,028/- u/s 14A of the IT Act. Thereafter assessment was reopened u/s 147 of the IT Act on the ground that while making original assessment and assessment u/s 143 r.w.s. 263, the appellant had claimed 30% deduction on the rental income received from Shri Ram School of Rs. 24,68,00/-. Further in the assessment order, the Assessing Officer allowed credit of TDS of Rs. 5,03,472/- which was not correct as per the reasons recorded. It is claimed by the Assessing Officer that since appellant has not disallowed expenses relating to earning of dividend income of Rs. 6,93,20,030/- therefore the expenses remain to be disallowed in the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormation in possession is based on mere change of opinion on same set of facts. It is seen that in the original assessment proceedings, the Assessing Officer sought clarification, explanation on various issues including the rent received from Shri Ram School and deduction claimed u/s 24 (a). On the basis of explanation furnished by the appellant on 27.9.2004 and 22.12.2004 on the issue of rent and dividend income, the Assessing Officer was satisfied with the explanation and contention of the appellant was accepted by the Assessing Officer in the original assessment order. Therefore, I am of the considered opinion that the reopening of the assessment without change in material fact and having any fresh information in possession is based on mere change of opinion on the same set of facts which is not permissible in the eyes of law." 6. Aggrieved, the revenue is in appeal before us. 7. At the outset, the Ld DR argued that Ld CIT(A) cancelled the assessment without going into the merits of the case. She argued that there were detailed reasons for reopening the assessment. The assessee had made wrong claim and therefore when this fact came to the knowledge of Assessing Officer he righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge 82, the Ld AR invited our attention to rent received from Shree Ram School amounting to Rs. 24,68,000/- which was furnished to the Assessing Officer. 9. As regards the second reason for reopening on account of non disallowance u/s 14A, the Ld AR took us to paper book pages 90 to 94 where a copy of assessee's letter dated 22.12.2004 was placed. Our attention was also invited to reply of query No.9 placed at paper book page 92. Our attention was also invited to paper book page 94 where the details of dividend income was placed. Our attention was also invited to paper book page 89 where noting of order sheet dated 6.12.2004 was placed. Our attention was also invited to specific query of Assessing Officer at Sl. No.9 for which he submitted that assessee had replied vide letter dated 22.12.2004. In view of the above explanation, the Ld AR argued that since there was specific query and there was specific reply and all the information was submitted as required by the Assessing Officer then there was no question of any failure on the part of the assessee. Regarding Ld DR's argument that issue be decided on merits of the case, the Ld AR submitted that revenue has not taken any ground ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case may be for the assessment year concerned (hereinafter in this section and in sec. 148 to 153 referred to as a relevant assessment year). Provided That where an assessment under sub section (3) of section 143 or this section has been made in the relevant assessment year no action shall be taken under this section after the expiry of four years from the end of 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 assessee to make a return u/s 139 or in response to a notice issued under sub section (1) to section 142 or section 148 or to disclose fully and truly all material facts for his assessment for that assessment year. Provided xxxxxxxxxxxxxxxx" From the plain reading of this section it is apparent that the provisions are applicable in the cases of assessment u/s 143(3) only if there was a failure on the part of assessee to furnish and disclose full and true material facts necessary for the assessment. Now going through the facts of the present case, we find that original assessment was completed u/s 143(3) vide order dated 31.3.2005. The assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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