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2015 (6) TMI 56 - ITAT MUMBAI

2015 (6) TMI 56 - ITAT MUMBAI - [2015] 43 ITR (Trib) 729 (ITAT [Mum]) - Reopening of assessment - reasons for assessment reopened are identical to the objections of the audit party - tangible material i - Held that:- Reasons for which the assessment is sought to be reopened are identical to the objections of the audit party and therefore the reasons did not rely upon any tangible material in the audit report but merely upon an opinion and the existing material already on record. This itself indi .....

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in law. Hence, we quash the reassessment for both the assessment years. - Decided in favour of assesse. - I .T.A. No.3132 & 3133/Mum/2012, I .T.A. No.3814/Mum/2012 - Dated:- 26-3-2015 - Shri Vijay Pal Rao And Shri N.K. Billaiya JJ. Dr. Firuza Rajesh Parikh & Others Versus Income Tax Officer & Others For the Appellant : Shri Vijay Mehta & Shri Priyesh Vira For the Respondent : Shri Sachidanand Dube ORDER Per Vijay Pal Rao, J.M. : These two appeals by the assessee pertaining to assess .....

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The appellant prays that the reopening of assessment under section 147 of the Act may be declared as bad in law and reassessment order may please be cancelled. 3. Since the issue raised in ground No. 1 in both the appeals of the assessee is a legal issue regarding validity of reopening and goes to the root of the matter, through we take up ground No. 1 of the assessee s appeal for adjudication. 4. The assessment for these assessment years were completed u/s 143(3) of the Income Tax Act, 1961 on .....

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5. Before us, the ld. A.R. has submitted that the reopening is based on audit objection and the A.O. has not formed any opinion that the income assessable to tax has escaped assessment. He has referred to the audit objection at page 3-4 of the paper book as well as reasons recorded by the A.O. at page 2 of the paper book and submitted that the reasons recorded by the A.O. for reopening of the assessment is verbatim copy of the audit objection and there is no application of mind and no independen .....

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ACIT 210 Taxmann 67. 6. On the other hand, the ld. D.R. has submitted that the A.O. while completing the assessment u/s 143(3) of the Act did not examine the expenses on medicine debited by the assessee. Further the assessee is not maintaining any stock register as per Rule 6 of the Income Tax Rules, 1962. Thus the assessee has not disclosed the correct and entire facts in the return of income and audit party has pointed out the in-correct claim of the assessee in the audit objection. Therefore .....

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ection 147 of the Act. He has also relied upon the order of the ld. CIT(A). 7. We have considered the rival submissions and also perused the relevant material placed on record. There is no dispute that the original assessment for both the years was completed u/s 143(3) of the Act. Subsequently the A.O. has reopened the assessment by recording the reasons as under:- 1. The assessee has paid rent of ₹ 1.43,029/ though she runs the clinic at her residence. 2. The assessee owns two flats, but .....

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required for the patient is best known by the treating doctor and is supplied by the doctor. It can be believed that the doctor has incurred cost of medicine for treatment and is not reimbursed from the patient Further, Jaslok deduction of ₹ 5,40,646/- pertains to usuage of room operation theatre and various facities provided by the hospital. This shows that the assessee takes private treatment for her patients in Jaslok Hospital. 8. These reasons recorded by the A.O. are nothing but the a .....

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image/copy of audit objection. We find that there are typographical mistake in the audit objection in para 4 which are also repeated in the reasons recorded by the A.O. as highlighted by us in the reasons recorded at two places. The first mistake occurred in the sentence it can be believed which ought to have been it cannot be believed and the second mistake in the last sentence is assessee takes private treatment which ought to have been assessee gives private treatment . This goes to prove th .....

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pointed out merely the factual error or omission but has given the finding in the shape of opinion that the medicine cost cannot be believed to have been incurred by the assessee and the same is reimbursed from the patient and it was also opined by the audit party that the assessee gives private treatment to the patient in the Jaslok Hospital. The A.O. adopted these observations of the audit party as reasons for reopening the assessments in question. Therefore, it is not a case of the A.O. that .....

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as not conferred power on the Assessing Officer to review its own order. Therefore, the power under section 147 cannot be used to review the order. In the present case, though the Assessing Officer has used the phrase reason to believe , admittedly between the date of the order of assessment sought to be reopened and the date of formation of opinion by the Assessing Officer, nothing new has happened, therefore, no new material has' come on record, no new information has been received" i .....

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as taken a clear view that reopening of assessment under section 147 merely because there is a change of opinion cannot be allowed. In our opinion, therefore, in, the present case also, it was not permissible for respondent No. 1 to issue notice under section 148. 10. Thus it is the pre-requisite for the A.O. to form opinion based on some new tangible material or information and not on the basis of change of opinion by re-appreciating the existing record/material available on record. 11. In the .....

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has to be the reasonable belief of the Assessing Officer himself and cannot be an opinion and/or belief of some other authority. In fact, the Supreme Court in the matter of India Eastern Newspaper Society v. Commissioner of Income Tax, New Delhi reported in 119 ITR page 996 has held that whether an assessment has escaped assessment or not must be determined by the Assessing Officer himself. The Assessing Officer cannot blindly follow the opinion of an audit authority for the purpose of arriving .....

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essing Officer before he issued the impugned notice. On this ground alone, the assumption of jurisdiction by the Assessing Officer can be faulted. x………x………x……..x………x……..x 9. Therefore, in view of the above, we are of the view that the impugned notice is without jurisdiction and the impugned order dealing with the objection of the Petitioner is non speaking order in as much as it does not deal with any of t .....

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