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TMI Blog2015 (6) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal of Revenue is against the order of CIT(A) in quashing the reassessment proceedings. For this, Revenue has raised following ground No.1:- "1. That on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that the reassessment proceedings are not in accordance with the provision of law whereas it was clearly as per law and the AO has followed and observed all the directions given by appellate authorities." 3. Briefly stated facts are that assessee is a domestic company engaged in the business of providing financial services such as hire purchase and leasing of machinery and vehicles, bill discounting and accepted fixed deposit from the public. The assessee filed returned income for the relevant AY 1999-00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cepted the contention of the assessee and assessee taken the matter in appeal before CIT(A) who quashed the reassessment proceedings and the relevant pare of the findings of CIT(A) reads as under:- "Now, the first issue to be decided in this appeal is the legality of issue of notice under section 148 of the IT Act. In the first place, the Assessing Officer had initiated proceedings under sec. 154 of the Act on the very issues regarding computing the book profit adding back the i. Lease equalisation charges ii. Provision for non performing assets (NPA), iii. Provision for diminution in the value of Investment. The matter went upto the Income-tax Appellate Tribunal at the instance of the Department, and the issue stands decided in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examined in re-assessment proceedings. Therefore, following the judgments delivered by the Hon'ble Supreme Court and that decided by the Hon'ble Bombay High Court in identical matters, I hold that the re-assessment proceedings are ab inito not in accordance with the provisions of law. The same is hereby cancelled." 4. We have heard the rival contentions and gone through the facts and circumstances of the case. We find from the facts of the case that the reopening u/s. 147 of the Act is made on the three counts i.e. lease equalisation charges, provision for nonperforming assets and provision for diminution in the value of investments. The assessee contended that on the item of lease equalisation charges the Tribunal has decided the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not have been referred to and, as a matter of fact, has not been referred to in support of the notice of for reopening the assessment. Though the judgment of the Supreme Court in CIT vs. Max India Limited, (2007) 295 ITR 282; (2008) 166 Taxman 188, arose in the context of Section 263, the principle that emerges is that the validity of a notice of the Assessing Officer seeking to reopen an assessment would have to be determined on the law as it prevailed on the date of the notice reopening of the assessment and has to be assessed with reference to the reasons recorded by the Assessing Officer This position has also been laid down in the judgment of this Court in Rallies India Limited vs. Assistant Commissioner of Income Tax. (2010) 323 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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