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TMI Blog2016 (7) TMI 1480X X X X Extracts X X X X X X X X Extracts X X X X ..... It is not the case of the Assessing Officer that there was any negligence on the part of the assessee in furnishing inaccurate particulars before completing the original assessment. In fact, the original assessment was completed. For the assessment year 2008-09, the assessment was reopened within four years. According to the Ld. representative, the assessee, a non-banking financial company, borrowed loan from several banks. The loan was settled by making one-time payment. The one-time settlement made by the assessee was the subject matter of earlier assessment and, in fact, the CIT(Appeals) deleted the addition made by the Assessing Officer with regard to one-time settlement. On further appeal by the Revenue, the same was confirmed by this Tribunal also. By placing reliance on the judgment of Delhi High Court in CIT v. Goyal M.G. Gases Ltd. (2010) 321 ITR 437, the Assessing Officer reopened the assessments for both the assessment years. According to the Ld. representative, an addition was made with regard to one-time settlement, which was in fact, deleted by the CIT(Appeals). On further appeal by the Revenue, the same was confirmed by this Tribunal. Now, the Assessing Officer clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment was made under Section 143(3) of the Act, reopening of assessment would amount to change of opinion. The Ld. representative has also placed his reliance on the judgment of Apex Court in CIT v. Kelvinator of India Ltd. (2010) 320 ITR 561 and the judgment of Full Bench of Delhi High Court in CIT v. Kelvinator of India Ltd. (2002) 256 ITR 1. 5. Placing reliance on the judgment of Gujarat High Court in General Motors India Pvt. Ltd. v. DCIT (2013) 354 ITR 244, the Ld. representative for the assessee submitted that when the Assessing Officer fails to dispose of the objection raised by the assessee for reopening of assessment, the Assessing Officer cannot pass an assessment order. According to the Ld. representative, after serving notice under Section 148 of the Act, the Assessing Officer was expected to give a copy of the reason recorded for reopening and the Assessing Officer thereafter has to consider the objection of the assessee and pass a speaking order. A copy of the order shall be served on the assessee and an opportunity shall be given to the assessee to challenge the order before appropriate forum. Therefore, according to the Ld. representative, the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance & Investment Co (P) Ltd. (2008) 216 CTR 191, the Ld. representative submitted that while computing income under Section 115J of the Act, the power of the Assessing Officer is to examine whether the book profit as computed was certified by the authorities under the Companies Act as having been properly maintained in accordance with the Companies Act. The A.O. thereafter has limited power to increase or reduce as provided for in the Explanation to the said Section. To put it differently, according to the Ld. representative, the Assessing Officer does not have jurisdiction to go behind the net profit shown in the Profit & Loss account except to the extent provided for in the Explanation to Section 115J of the Act. 8. On the contrary, Shri B. Koteswara Rao, the Ld. Departmental Representative, submitted that the assessee borrowed loan from several banking institutions and the same was settled by one-time payment. Therefore, the banking institutions waived their claim for providing one-time settlement. The payment of one-time settlement was the subject matter of litigation before this Tribunal. This Tribunal found that one-time settlement cannot be the subject matter of taxation u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titutions were not routed through Profit & Loss account, the Assessing Officer has rightly recomputed the book profit. 10. Referring to reopening of the assessments, the Ld. Departmental Representative submitted that no assessment order was passed under Section 143(3) of the Act. In fact, the returns of income were processed under Section 143(1) of the Act. Placing reliance on the judgment of Apex Court in ACIT v. Rajesh Jhaveri Stock Brokers P. Ltd. (2007) 291 ITR 500, the Ld. D.R. submitted that once the conditions provided under Section 148 of the Act were satisfied, the Assessing Officer has every right to reopen the assessment, therefore, the contention of the Ld. representative for the assessee that the assessment was reopened beyond four years is not correct. Even though the assessment was reopened beyond four years for the assessment year 2007-08, since no assessment was made under Section 143(3) of the Act, provisions of Section 147 of the Act may not be applicable at all. Referring to the assessment order for both the assessment years, the Ld. D.R. submitted that the Assessing Officer in categorical terms recorded that there was a failure on the part of the assessee to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is bad in law. For the assessment year 2008-09, the Ld. representative for the assessee contends that the reopening of assessment was due to change of opinion. The assessee also claims that in response to notice under Section 148 of the Act, an objection was filed for reopening of assessment. For the assessment year 2007-08, the objection was filed before the Assessing Officer on 04.07.2014 and for the assessment year 2008- 09, the objection was filed on 19.03.2015. The assessee claims that these objections were not disposed off by the Assessing Officer before passing the assessment orders. The question now arises for consideration is - Can the Assessing Officer proceed further in the assessment proceeding without disposing of the objections filed by the assessee for reopening the assessment? This issue was subject matter of discussion before the Gujarat High Court in General Motors India Pvt. Ltd. (supra). The Gujarat High Court, after considering the case laws on the subject, has observed as follows:- "23. A Division Bench of this court in Arvind Mills Ltd. v. Asst. CWT (No. 2) [2004] 270 ITR 469 (Guj), after considering the decision of this court in Garden Finance Ltd. v. Asst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the writ petition under article 226 of the Constitution of India is maintainable where no order has been passed by the Assessing Officer deciding the objection filed by the assessee under section 148 of the Act and assessment order has been passed or the order deciding an objection under section 148 of the Act has not been communicated to the assessee and assessment order has been passed or the objection filed under section 148 has been decided along with the assessment order. If the objection under section 148 has been rejected without there being any tangible material available with the Assessing Officer to form an opinion that there is escapement of income from assessment and in the absence of reasons having direct link with the formation of the belief, the writ court under article 226 can quash the notice issued under section 148 of the Act. The writ petition filed by the petitioner is maintainable. The Assessing Officer is mandated to decide the objection to the notice under section 148 and supply or communicate it to the assessee. The assessee gets an opportunity to challenge the order in a writ petition. Thereafter, the Assessing Officer may pass the reassessment order. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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