TMI Blog2018 (2) TMI 1646X X X X Extracts X X X X X X X X Extracts X X X X ..... hri K. V. S. R. Krishnan, CA ORDER PER R. K. PANDA, AM : This appeal filed by the Revenue is directed against the order dated 24.04.2017 of CIT(A)- 39, New Delhi relating to assessment year 2009-10. 2. Facts of the case, in brief, are that the assessee is a Private Limited Company. The original assessment u/s 143(3) was completed on 16.12.2011 at income of ₹ 4,41,554/- under normal provisions and at ₹ 4,20,37,665/- u/s 115JB of the I.T. Act. Subsequently, the Assessing Officer reopened the assessment by recording the following reasons which has been reproduced by the ld. CIT(A) in the body of the appellate order and which reads as under :- The assessment 143(3) of the IT Act, of M/s. Isolloyd Engineering Technology Pvt. Ltd. For the assessment year 2009-10 was completed on 16.12.2011 at an income of ₹ 4,41,550/- under normal provision and at ₹ 4,20,37,665/- u/s 115JB of the Act. On perusal of the record it is revealed that the assessee had earned other income amount to ₹ 46,32,178/-. Among other constituents, the other income also includes the income from sale of scrap of ₹ 38,85,685/- and Misc. Income of ₹ 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s at (f) to (h) are general in nature and not pressed by the appellant during the course of appeals. Accordingly, these grounds are not discussed in this order. 5.1 As regards the grounds at (a), (b), (c) and (d) above relating to the reopening the original assessment u/s 143(3) and the subsequent re-assessment vide the impugned order, these are considered together as all these grounds converge on the appellant's objection to the reopening of the assessment u/s 143(3). It has been held by the Allahabad High Court in Ms. Teena Gupta Vs CIT, Bareilly (ITA No.87/2009) inter alia, it is settled law that the reassessment notice is a jurisdictional notice and it is equally settled law that ground of lack of jurisdiction may be raised at a subsequent stage as well . Accordingly, the grounds that pertain to the reopening of the completed assessment are addressed first. It is observed from the impugned order that the original assessment u/s 143(3) was completed on 16/12/2011. Further, it is seen therefrom that it is mentioned, inter alia, ... On verification of the case record, it has been observed that the assessee has earned other income amounting to ₹ 46, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 78/- u/s 80IC of the Act. By doing so, the assessee has not disclosed its income truly to the extent of ₹ 41,48,678/-. Based on the above facts, I have reason to believe that the income of the assessee chargeable to tax to the extent of ₹ 41,48,678/- has escaped assessment ... From the above reason, it is observed that the original assessment u/s 143(3) did not take into account the appellant's claim of deduction u/s 80IC on the other income, consisting of, among others - income from sale of scrap and miscellaneous income disclosed in its return of income for the relevant AY. While it is observed from the submissions filed at the appellate stage that the reasons for reopening the original assessment done in 2011 that income has escaped assessment it further mentions that the appellant has not disclosed its income truly to the extent of ₹ 41,48,678/-. 5.4 Section 147 of the Act (post 1989) deals with reopening of an assessment wherein it states, If the ,Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of original assessment and which were noticed, recorded and the AO has applied his mind, will tantamount to change of opinion only ... . In fact, it has been argued by the AR of the appellant that after an assessment is completed u/s 143(3) it has been held in a plethora of court judgements that there has been 'application of mind'. 5.6 It is further observed from the letter dated 24/10/2014, as gathered from the appellant's submissions wherein the appellant's objections to the reopening of the original assessment were rejected, that in addition to the provisions of Section 147 of the Act, reliance was placed on the following court decisions in this regard - Gruh Finance Ltd Vs. Joint Commissioner of Income tax 243 ITR 482 (Guj) Praful Chunilal Patel Vs. M J Makwana ACIT (1999) 236 ITR (Guj) Bawa Abhal Singh Vs. DCIT (2001) 253 ITR 83 (Del) Ranchi Club Vs. CIT (1995) 214 ITR 643 (Patna) Nagrath Chemical Works (P) Ltd Vs. CIT (2004) 265 ITR 401 (All) Also, that the Hon'ble Supreme Court in a number of judicial decisions has already held that in determining whether commencement of reassessment proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reopening of assessment amounts to review or change of opinion arises. In other words, if there is no reasons to believe based on new, tangible materials , then the reopening amounts to an impermissible review ... 5.8 It is also observed from the appellant's submissions, both at the assessment stage and at the appellate stage mentioned earlier, that it had placed reliance on the decision of the jurisdictional High Court (Delhi HC) that has been ratified by the Hon'ble Supreme Court with regard to the reopening and the manner in which the foundation for the belief that income has escaped assessment. In CIT Vs Kelvinator of India Ltd (2002) 256 ITR 1 (Del) it was observed that an order that has been purportedly passed without application of mind could not itself confer jurisdiction upon the AO to reopen the proceeding without anything further as that would amount to giving a premium to an authority exercising quasi-judicial function to take benefit of its own wrong . Further, upholding this decision of the Delhi High Court, the Hon'ble Supreme Court in CIT Vs. Kelvinator of India Ltd (2010) 320 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no escapement of income; the income being assessed u/s 115JB of the Act, the reopening of the original assessment u/s 143(3) by resorting to Section 147 of the Act based on the reasons mentioned above is, in my opinion, void ab initio and accordingly, the rejection of the appellant's objection to the reopening of the original assessment u/s 143(3) as well as the subsequent order of reassessment u/s 143(3) r w 147 of the Act are cancelled (albeit without going into the merits of the addition of the income escaping assessment per se). 6. Taking all the above paras into consideration, the appeal is hereby allowed. 7. Since in the instant case no new tangible material was available with the Assessing Officer and such re-assessment is based on the same materials as were available during the original proceedings since the issue of sale of scrap and miscellaneous income was considered by the Assessing Officer in the body of the assessment order, therefore, the action of the Assessing Officer, in my opinion, is a mere change of opinion in a completed assessment u/s 143(3) and, therefore, I find merit in the order of the ld. CIT(A) quashing such reassessment proceedings. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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