TMI Blog2018 (12) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... which has been passed purportedly without application of mind would itself confer jurisdiction upon the AO to reopen the proceedings without anything further, the same would amount to giving premium to an authority exercising quasi-judicial function to take benefit of its own wrong. The necessary ingredients of section 147 in the form of tangible material post completion of assessment proceedings are conspicuously absent. Hence the reopening of assessment does not survive. The assessee was not able to realize interest income offered by it on amount advanced to Six Sigma Gases Pvt. Ltd. in the earlier two assessment years. During the year under consideration, the assessee had duly taken note of the poor financial condition of Six Sigma Ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the validity of re-opening proceedings u/s 147 of the Act and consequentially bringing to tax a sum of ₹ 34,58,000/- towards interest income on loan advanced to Six Sigma Gases Pvt. Ltd. on notional basis. 3. The brief facts of this issue are that the return of income for the assessment year 2008-09 was filed by the assessee company on 23.09.2008. The assessee was completed u/s 143(3) on 02.12.2010 determining total income at ₹ 62,10,223/-. Later the assessment was sought to be reopened by issuance of notice u/s 148 of the Act dated 27.04.2012. The reasons recorded by the ld. AO for reopening the assessment are as under: OFFICE OF THE JOINT COMMISSIONER OF INCOME TAX (OSD), CIRCLE-4 P- 7, CHOWRINGHEE SQUARE, AAYAKAR BHA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be the reason for not charging the interest in the FY 2007-08 if the assessee had been following mercantile system of accounting. As per provision of the Act, writing off bad debt of an amount in the P/L account entitles an assessee to claim deduction in the computation of tax. Yours Faithfully (P.B.Pramanik) JCIT, (OSD), Circle-4, Kolkata. The assessee filed objections to the said reasons vide its letter dated 18.09.2012 wherein it was specifically brought to the notice of the ld. AO that in the course of original assessment proceedings u/s 143(3) of the Act, a specific query was raised as to why interest had not been charged on the amount advanced to M/s Six Sigma Gasses Pvt. Ltd. The assessee had submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings that since this issue was already examined by the ld. AO in the original assessment proceedings, reopening of the assessment on the same issue on which decision was already taken by the ld. AO after due application of mind, tantamount to change of opinion and accordingly it was contested that the reopening was not in accordance with law. The assessee placed reliance in support of this proposition on various decisions of Hon ble Supreme Court and Hon ble Jurisdictional High Court. It was also pointed out that there was no allegation that there was any malafide on the part of the assessee in postponing or shifting the income to subsequent years for the purpose of taxation. No new material or tangible material or other evidences h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the same is required to be brought to tax in the sum of ₹ 34.58 lacs. This action of the ld. AO was upheld by the ld. CIT(A). Aggrieved the assessee is in appeal before us. 5. We have heard rival submissions. At the outset, we find that the reopening of the assessment for the assessment year 2008-09 has been made within the four years from the end of the relevant previous year. Hence the applicability of that proviso to section 147 on the aspect of failure of the assessee to make full and true disclosure of the facts does not apply in the instant case. We find from the facts narrated above that the ld. AO had duly applied his mind in the original assessment proceedings by raising a specific query on non-charging of interest on am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his mere change of opinion. If reason to believe of the ld. AO is founded on an information which might have been received by the ld. AO after completion of assessment, it might be a sound foundation for exercising the power u/s 147 of the Act. When a regular assessment u/s 143(3) has been made earlier, a presumption can be raised that such an order has been passed on due application of mind. It is well known that a presumption can also be raised to the effect that in terms of section 114(e) of the Indian Evidence Act and judicial and official acts have been regularly performed. The Hon ble Supreme Court in the case of Kelvinator of India Ltd. reported in 320 ITR 561 (SC) had held in similar circumstance that if it be held that an order wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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