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TMI Blog2019 (1) TMI 1325X X X X Extracts X X X X X X X X Extracts X X X X ..... ring assessment under section 143(3) of the Act. 2. The Ld. CIT(A) has erred in upholding action of the Ld. AO in passing the assessment by disregarding the objections raised by the appellant against the reopening of the assessment proceedings. 3. The Ld. CIT(A) erred in upholding the initiation of re-assessment by the Ld. AO, merely on the basis of the audit objections dated February 01, 2012 raised by 'Office of the Director General of Audit (Central Receipt)'. 4. The Ld. CIT(A) has erred in upholding the action of the Ld. AO in reopening of assessment without independent application of mind to determine whether the income of the appellant for the relevant year has escaped assessment. 5. The Ld. CIT(A) has erred in rejecting the contentions raised by the appellant by providing incorrect / irrelevant reasoning. 6. The Ld. CIT(A) has erred in making irrelevant observation in the order. 7. The Ld. CIT(A) has erred in confirming the action of the Ld. AO in disallowing the provision for inventory created by the appellant during the relevant year. 8. The Ld. CIT(A) as well as Ld. AO has erred in ignoring the judicial pronouncements relied upon by the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection and relied on the following case laws. 1. Indian and Eastern Newspaper Society vs. Commissioner of Income Tax (1979) 119 ITR 996 2. Duncan Services Limited vs. Income-tax Officer and other [1992] 198 ITR 264 3. Transworld International Inc. vs. Joint Commissioner of Income Tax (2005) 142 TAXMAN 35 (Delhi) 4. ICICI Home Finance Co. Ltd. vs. ACIT and Union of India 2012 (114) Bom. L.R. 2724, observed as under: 5. Commissioner of Income Tax vs. T.V.S Ltd. [2001] 249 ITR 306 (SC) 6. ITO vs. Satya Prakash Agarwal, (ITA No. 3729/Del/2011) I have discussed the matter with the ARs and convinced them that there should be some remedy for disposal of audit objection by the Assessment Officer or by the department, so such legal issues like non-reopening u/s 148 should not be viewed seriously. It is better to go on the merits of the case, so that government can collect proper tax for the development of the country. Therefore, I will go on the merits of the case and in my opinion the reopening of the case u/s 147/148 of the Income Tax Act on the above of audit objection is justified. The audit wing of the department or revenue audit of CAG are the agencies to give feed back ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliminary issue itself the reassessment proceedings should be quashed and the subsequent proceedings thereafter should also be quashed. 9. The ld. DR, on the other hand, heavily relied on the order of the CIT(A). 10. We have considered the rival arguments and perused the material available on record. The reasons recorded for the reopening of the assessment have already been reproduced in the preceding paragraphs. A bare perusal of the reasons recorded shows that there is no allegation by the Assessing Officer of any failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of the assessment. In absence of such allegation of failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of the assessment, the reassessment proceedings have been held to be invalid by various decisions. The Hon'ble Bombay High Court in the case of Hindustan Lever Ltd. vs. R.B. Wadkar (2004) 268 ITR 332 (Bom), has held that where reasons recorded by the Assessing Officer nowhere stated that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t vital link is the safeguard against arbitrary reopening of the concluded assessment. The reasons recorded by the Assessing Officer cannot be supplemented by filing affidavit or making oral submission, otherwise, the reasons which were lacking in the material particulars would get supplemented, by the time the matter reaches to the Court, on the strength of affidavit or oral submissions advanced. 21. Having recorded our finding that the impugned notice itself is beyond the period of four years from the end of the assessment year 1996-97 and does not comply with the requirements of proviso to section 147 of the Act, the Assessing Officer had no jurisdiction to reopen the assessment proceedings which were concluded on the basis of assessment under section 143(3) of the Act. On this short count alone the impugned notice is liable to be quashed and set aside. 22. Since we are setting aside the impugned notice only on the first ground of challenge, in our opinion it is not necessary to go to the other question and record our findings in that behalf." 11. The Hon'ble Delhi High Court in the case of Pr. CIT vs. Samcor Glass Ltd. & Ors., vide ITA Nos.768 and 769 of 2015, 12th Oct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure that an order for reopening of an assessment clearly records the compliance with each of the legal requirements. Secondly, the AOs must be directed to strictly comply with the law explained by the Supreme Court in GKN Driveshafts (India) Ltd v. Income Tax Officer (2003) 259 ITR 19 (SC) as regards the disposal of the objections raised by the Assessee to the reopening of the assessment." 12. The various other decisions relied on by the ld. counsel for the assessee also supports the view that where the reasons recorded by the Assessing Officer do not state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment of that assessment year and the notice was clearly beyond the period of four years from the end of the relevant assessment year, such reassessment proceedings are barred by limitation. There is also another aspect which merits consideration. It is an admitted fact that the reassessment was made on the basis of audit objection. The Hon'ble Supreme Court in the case of Indian and Eastern Newspaper Society vs. CIT, 119 ITR 996(SC) has held that the view expressed by internal audit party on a point of law c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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