TMI Blog2018 (12) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... same was based merely on the change of opinion and the assessment completed by him under section 143(3)/147 in pursuance thereof was liable to be cancelled being invalid. - Decided in favour of assessee. - I. T. A. Nos. 1346 And 1347/KOL/2015 - - - Dated:- 7-12-2018 - Shri P. M. Jagtap, Vice-President (KZ) And Shri A. T. Varkey, Judicial Member For The Appellant : Md. Usman, CIT, D. R. For The Respondent : Shri Ami t Patni , FCA. Smt , Puja Agarwal , ACA ORDER Per Shri P. M. Jagtap, Vice-President (KZ):- These two appeals filed by the Revenue are directed against two separate orders both dated 15.09.2015 passed by the ld. Commissioner of Income Tax (Appeals)-8, Kolkata and since the solitary issue raised therein relating to the validity of re-assessment made by the Assessing Officer is common, the same have been heard together and are being disposed of by a single consolidated order. 2. First we take up the appeal of the Revenue for A.Y. 2006-07 being ITA No. 1346/KOL/2015, wherein the following grounds are raised by the Revenue:- (1) That the ld. CIT(A) has erred in annulling the order u/s 147 basing on 1st proviso to section 147 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and after considering the submission made by the assessee as well as the material available on record, the ld. CIT(Appeals) found merit in the contention raised on behalf of the assessee that the re opening of assessment originally completed under section 143(3) beyond a period of four years without there being any failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment was bad-in-law by virtue of the 1st proviso to section 147. He further held that initiation of re-assessment proceedings under section 147/148 was also bad-in-law as the prior sanction of the concerned authority as required under the proviso to sub-section (1) of section 151 was not obtained. He accordingly annulled the assessment made by the Assessing Officer under section 147/143(3) vide his appellate order dated 15.09.2015. Aggrieved by the order of the ld. CIT(Appeals), the Revenue has preferred this appeal before the Tribunal. 5. The ld. D.R. relied on the reasons recorded by the Assessing Officer in support of the revenue s case that the re-opening of assessment was in accordance with law and the ld. CIT(Appeals) was not justified in annulling the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that any income chargeable to tax had escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. A perusal of the reasons recorded by the AO however shows that no such failure on the part of the assessee was pointed out by him as envisaged in the first proviso to section 147. We, therefore, find merit in the contention of the learned counsel for the assessee that the reopening of assessment by the AO was barred by limitation and the assessment made by the AO under section 147/143(3) in Pursuance thereof was liable to be cancelled being invalid as rightly held by the ld. CIT(Appeals). We, therefore, uphold the impugned order of the ld. CIT(Appeals) on this issue and dismiss the appeal of the Revenue for A.Y. 2006-07. 8. Now we shall take up the appeal of the Revenue for A.Y. 2007-08 being ITA No. 1347/KOL/2015, wherein the following grounds are raised:- (1) That the ld. CIT(A) has erred in annulling the order u/s 147 by treating the same being mere change of opinion ignoring the decision of the Full Bench of Delhi High Court in the case of CIT vs.- Usha International Limited. (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer on the basis of same material, which was already available on record was bad-in-law as the same was based merely on a change of opinion. He accordingly annulled the assessment made by the Assessing Officer under section 147/143(3) of the Act vide his appellate order dated 15.09.2015. Aggrieved by the order of the ld. CIT(Appeals), the Revenue has preferred this appeal before the Tribunal. 11. We have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that the assessment originally completed under section 143(3) was reopened by the Assessing Officer after recording the following reasons:- (1) On Scrutiny of records, it is revealed that assessee computed his total Income to the tune of ₹ 205,61,87,822/- which included income from business of ₹ 202,86,77,822/- after set off of brought forward business loss of ₹ 53,26,37,298/- for A/Y 2002-03 and income from House property of ₹ 275,10,000/-. Record also further revealed that business income of the assessee included interest of ₹ 23082.71 lakhs received from deposits accounts with scheduled banks (deposits of ₹ 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing which is carried on by the assessee. In the instant case, the debt was never taken into account in the P/L a/cs or in computing the income of the assessee. During the year itself there was on addition of debt amounting to ₹ 717.75 lakhs which was neither accounted for in the P/L A/cs nor in computing income of the assessee. Again. assessee was neither a banking institution nor a money lender. Assessee simply created a fund from its own contribution and incurred expenditure on behalf of its subsidiary (ECL) from that fund to be recovered only after the mining activities in the block of ECL was projectised and implemented by the ECL which was again contingent in nature. Therefore, allowance of debt of ₹ 360.06 lakhs u/s.36(1)(vii) was irregular which was required to be disallowed. Omission resulted in underassessment of income by ₹ 360.06 lakhs with consequential tax effect of ₹ 163,15,409/-. 12. A perusal of the reasons recorded by the Assessing Officer also makes it abundantly clear that the assessment originally completed by him under section 143(3) was reopened by the Assessing Officer on the basis of the same material as was available ..... X X X X Extracts X X X X X X X X Extracts X X X X
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