TMI Blog2016 (1) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment order it appears that, AO has applied his mind and has reached to a certain conclusion in respect of claim u/s 10B.From the perusal of the “reasons recorded”, it is evident that there is no whisper or reference about any tangible material coming on record having live-link-nexus with the income chargeable to tax escaping assessment. AO in the original assessment order has applied his mind and even noted down the entire facts and has computed the deduction u/s 10B. It is not a case where the assessment order is sub-silentio on the issue on which reasons have been recorded. Accordingly, on preliminary ground, we hold that the impugned assessment order passed u/s 143(3) r.w.s. 147 passed in pursuance of notice u/s 148 is void-ab-initio and deserves to be quashed. We order accordingly. - Decided in favour of assessee - ITA No. : 5359/Mum/2011 - - - Dated:- 16-11-2015 - SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Appellant : Shri Madhur Agarwal For The Respondent : Shri L K Dehiya ORDER PER AMIT SHUKLA, JM: The aforesaid appeal has been filed by the assessee against impugned order dated 29.03.2011, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... original assessment order reads as under:- The assessee has started manufacturing form the AY 1994- 95 onwards. However, it has started claiming deduction u/s 10B from the AY 1997-98 for which certificate from an accountant as prescribed by Rule 16E in form no. 56G was submitted along with the return of income Thereafter, the AO computed the profit and deduction u/s 10B in the following manner:- Thus, the assessee s claim for exemption u/s 10B was duly examined and adjudicated upon by the AO in the order passed u/s 143(3), dated 24.03.2006. After having completed the assessment in the aforesaid manner, the assessee s case was reopened vide notice dated 20.03.2009 u/s 148 after recording the following reasons :- The return of income in this case was filed on 1.11.2004 declaring a total Income at NIL after claiming deduction u/s 10B of ₹ 11,84,96,323/- and balance income h is set off against b/f Losses. The return was processed uls.143(1) on 5,02.2004. The assessment under section 143(3) was completed on 24-1-05 accepting the returned Income. The assessment u/s 143(3) was completed on 24-3-06 computing income at Nil but reducing the claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowed the claim of deduction u/s 10B for sum of ₹ 11,84,96,323/-. 4. This action of the AO has been confirmed by the CIT(A) including the assessee s challenge of validity of reopening. Besides this, the assessee before the CIT(A) has raised the alternative issues of claim of deduction u/s 80IA for the Power generation unit and claim u/s 80HHC from the export of the unit, to which assessee was entitled to. In support the assessee had filed audit report in prescribed form. The Ld. CIT(A) has rejected the assessee s alternative claim made for the first time on the ground that this has not been taken earlier and it amounts to review of original assessment order which is not permissible and it is purely an afterthought by the assessee. 5. Before us the Ld. Counsel, Shri Madhur Agarwal after explaining the entire facts submitted that, here in this case, the assessee had made full disclosure of its claim u/s 10B which has been examined and allowed by the AO in the original assessment proceedings. The AO has also noted the fact that assessee had started its production in the assessment year 1994-95 and claim for the first time u/s 10B was made from the assessment year 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly relied upon Full Bench decision in the case of CIT vs Usha International Ltd., reported in [2012] 253 CTR (Del)(FB) 113 wherein, the Hon ble Delhi High Court has also explained the decision of Hon ble Supreme Court in the case Kelvinator of India. He drew our specific reference to para 13 of the decision, wherein it was held that reassessment would be invalid in the cases where in the assessment order itself the issue has been raised and decided in favour o the assessee or a query was raised by the AO which has been specifically answered by the assessee. Otherwise, it would not amount to change of opinion. If the AO has not examined the particular subject matter, then he cannot be held to be forming any opinion. Thus, there is no question of any change of opinion as argued by Ld. Counsel. On similar proposition he further referred to the decision of Hon ble Gujarat High Court in the case of Gujarat Power Corporation Ltd. vs ACIT, reported in [2013] 350 ITR 266. Regarding plea of the Ld. Counsel, that there was no tangible material, he relied upon the decision of Hon ble Bombay High Court in the case of Export Credit Guarantee vs Addl CIT, reported in 350 ITR 651, wherein Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cases where assessment have been completed u/s 143(3), the primary requirement is that the issue which has been examined and dealt upon by the AO cannot be reopened unless there is tangible material coming on record. The Hon ble Supreme Court in the case of CIT vs Kelvinator of India Ltd (supra) emphasized very heavily that the power to reopen an assessment is not akin to a power to review the order of the assessment and reopening cannot be done on mere change of opinion. Unless the AO has any tangible material to reopen an assessment, the power u/s 147 cannot be validly exercised. Here in this case, as stated above, the AO has specifically dealt with this issue and has noted these facts about period of production and the period from assessee has chosen to claim deduction. If some legal mistake is committed by the AO or proper inference has not been drawn section 147 does not empower the succeeding AO to exercise the power of review so as to change the conscious decision taken by the predecessor AO. This is the clear cut mandate of Hon ble Supreme Court in Kelvinator India (supra). In the case of Aroni Commercials Ltd, the Hon ble jurisdictional High Court after considering the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act seeking to reopen an assessment. These reasons cannot be improved upon and/or supplemented much less substituted by affidavit and/or oral submissions. Moreover, the reasons for reopening an assessment should be that of the Assessing Officer alone who is issuing the notice and he cannot act merely on the dictates of any another person in issuing the notice. Moreover, the tangible material upon the basis of which the Assessing Officer comes to the reason to believe that income chargeable to tax has escaped assessment can come to him from any source, however, reasons for the reopening has to be only of the Assessing Officer issuing the notice. At the stage of issuing notice under section 148 of the Act to reopen a concluded assessment the satisfaction of the Assessing Officer issuing the notice is of primary importance. This satisfaction must be prima facie satisfaction of having a reason to believe that income chargeable to tax has escaped assessment. At the stage of the issuing of the notice under section 148 of the Act it is not necessary for the Assessing Officer to establish beyond doubt that income indeed has escaped assessment 9. Further, after analyzing the legal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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