TMI Blog2014 (9) TMI 1112X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee against the order dated 22/07/2014 of Ld. CIT(A), Bikaner. The following grounds have been raised in this appeal:- 1. That the order passed by the Assessing Officer and sustained by the Ld. CIT(A) is illegal and against the law. 2. That the action taken u/s. 147/148 of the I.T. Act by the Assessing Officer and sustained by the Ld. CIT(A) is illegal and against the law. 3. That the action taken on the basis of audit objection, by the Assessing Officer and sustained by the Ld. CIT(A) is illegal and against the law. 4. That the addition amounting to ₹ 6,00,000/- made and confirm by the Ld. CIT(A) is illegal and against the law. 2 Facts relating to this case, in brief, are that the assessment in this was completed u/s. 143(3) of the I.T. Act, 1961 (hereinafter referred to as the Act in short) at an income of ₹ 7,62,140/-. Later on, the Assessing Officer initiated the proceedings u/s. 147 of the Act by issuing notice u/s. 148 of the Act. In response, the assessee submitted that the return filed u/s. 139(1) of the Act may be treated as having filed in response to the notice u/s. 148 of the Act. The assessee also requested for supply of rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fically referred to the material on record in the assessment order but has examined the material and recorded in the order sheet, does not indicate or give a ground to hold that the Assessing Officer did not apply his mind. f. That the power to reopen an assessment was conferred by the legislature not with the intention to enable the assessing officer to reopen the final decision made against the Revenue in respect of questions that directly arose for decision in earlier proceedings. If that were not the legal position it would result in placing an unrestricted power of review in the hands of the assessing authorities depending on their changing moods. Since the assessment has been framed u/s 143(3) there is no new material/information came before the assessing officer, neither there is any change in law. Having such situation the jurisdiction cannot be invoked u/s 148 to reconsider the issue which was examined during the course of original assessment proceeding. g. That reassessment jurisdiction is meant for covering escaped income but where an issue was subject matter of consideration on the part of the Assessing Officer in the original assessment; reassessment is not p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee were duly met. The Assessing Officer made the addition of ₹ 6,00,000/- and assessed the income at ₹ 13,62,840/-. Against the assessment order passed by the Assessing Officer, the assessee went in appeal before the Ld. CIT(A) and challenged the validity of reassessment proceedings by stating that the action was taken by the Assessing Officer on the basis of audit objection. The assessee also furnished copy of the audit objection and stated that the action taken was illegal. Reliance was placed on the following case laws:- 1) Indian and Eastern Newspaper Society Vs. CIT, New Delhi [119 ITR 996]. 2) CIT Vs. Kalvinator of India 256 ITR 1 (Del.) It was further stated that the action taken by the Assessing Officer was merely a change of opinion because his predecessor accepted the gift as genuine gift and accepted that it was not includable in the income, hence, it was not income of the assessee. Therefore, the reassessment completed was liable to be quashed. Reliance was placed on the decision of the ITAT Jodhpur Bench in the case of Raj Kumar Agarwal, Makrana Vs. ITO, Ward-2, Makrana in I.T.A.No. 884/JU/2007. 4. The learned CIT(A), after considering the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss may draw the attention of the ITO to it. Law is one thing, and its communication another. If the distinction between the source of the law and the communication of the law is carefully maintained, the confusion which often results in applying section 147(b) may be avoided. While the law may be enacted or laid down only by a person or body with authority in that behalf, the knowledge or awareness of the law may be communicated by anyone. No authority is required for the purpose. That part alone of the note of an audit party which mentions the law which escaped the notice of the ITO constitutes information within the meaning of s. 147(b) ; the part which embodies the opinion of the audit party in regard to the application or interpretation of the law cannot be taken into account by the ITO. In every case, the ITO must determine for himself what is the effect and consequence of the law mentioned in the audit note and whether inconsequence of the law which has now come to his notice he can reasonably believe that income has escaped assessment. The basis of his belief must be the law of which he has now become aware. The opinion rendered by the audit party in regard to the law cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons are rejected and additions/disallowances are made. 10. In the present case also when the original assessment was framed u/s. 143(3) of the Act all the material was available on the record and the Assessing Officer applied his mind by making a deep scrutiny while framing the assessment u/s. 143(3) of the Act. The reassessment proceedings were initiated on the basis of the audit objection which cannot form the basis for the Assessing Officer to reopen the closed assessment. This view is also supported by the ratio laid down by the Hon'ble Gujarat High Court in the case of Cadila Healthcare Ltd. Vs. ACIT (OSD) another reported in (2013) 355 ITR 393 wherein it has been held as under:- It is only the Assessing Officer whose opinion with respect to the income escaping assessment would be relevant for the purpose of reopening of a closed assessment. The mere opinion of the audit party cannot form the basis for the Assessing Officer to reopen the closed assessment that too beyond four yours from the end of the relevant assessment year. In view of the above said judicial pronouncements, we are of the view that the notice issued by the Assessing Officer on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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