TMI Blog2019 (11) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... ew but a power to reassess. Permitting reopening of assessment on a change of opinion as to the taxability of the income of the Assessee is, thus, outside the scope of Section 147. We further find that the reopening has been done in the present case on the basis of Revenue Audit Objection which does not constitute an information for the purpose of reopening of assessment as held by the Hon ble Supreme Court in the case of CIT Vs. Lukas TVS Ltd. [ 2000 (12) TMI 102 - SC ORDER ] wherein it was held that an audit opinion in regard to the application or interpretation of law cannot be treated as information for reopening of the assessment u/s.147 - Decided in favour of assessee - I.T.A No.871/Del/2017 - - - Dated:- 18-11-2019 - Shri Amit Shukla, Judicial Member And Shri O.P.Meena, Accountant Member For the Assessee : Ms. Rano Jain, Advocate, Ms. Mansi Jain CA and Pranshu Singhal CA For the Revenue : Shri S. S. Rana CIT(D.R.) ORDER PER O.P.MEENA, AM: 1. This appeal by the Assessee is directed against the order of Ld. Commissioner of Income Tax (Appeals), Rohtak, dated 25.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lafide intention or negligence on the part of the assessee in filing of the appeal. Therefore, we condoned the delay of 41 days in filing of appeal and allow the appeal be admitted for decision on merit. 6. Grounds raised by the Assessee read as under: 1. On the facts and circumstances of the case, the order passed by the Ld. Commissioner of Income Tax (Appeals) and Ld. AO is bad both in the eye of law and on facts. 2. That the Ld. AO has erred both in the eyes of law and facts of the case while issuing the notice u/s 148 on the basis of audit objection, without independent application of mind, which is not reasons to believe as per law. 3. That the Ld. AO has erred both in the eyes of law and facts of the case in issuing notice u/s 148 of the Act despite the fact that assessment in the case of the appellant was already made u/s 143(3) of the Act and the same issue was discussed in detail during the original assessment proceedings. Thus reopening amounts to change of opinion, which is not permissible under the law. 4. That the Ld. AO has erred both in the eyes of law and facts of the case by record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter taking approval of JCIT (E) Chandigarh. In response notice under section 148 of the Act, the assessee vide letter dated 20.04.2015 submitted that the original return filed by it may be treated as return filed in response to notice u/s.148 of the Act. Accordingly, statutory notices u/s.143(2) and 142(1) of the Act were issued and the assessment was made u/s.143(3) r.w.s 147 of the Act on 17.12.2015 thereby disallowing the exemption of ₹ 17,07,726/- claimed u/s.10(23C)(iiiab) of the Act. 9. Being aggrieved, the assessee filed this appeal before the ld. CIT (A) challenging the reopening of the assessment on the ground that it was reopened based on audit objection and it amounts to mere change of opinion, therefore, it was not warranted under the Law. Reliance was also placed on the decision of CIT vs. Lucas TVS Ltd., [2001] 249 ITR 306 (SC) wherein it was held that a opinion of the audit party regarding application or interpretation of law is not information, and as such, a reassessment based on opinion of audit party is not valid. It was further contended that the AO while framing assessment u/s.143(3) has considered the fact about the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he notice u/s.142(1) dated 03.02.2012 issued by the AO [placed at Paper Book Page No. 1] in the original assessment proceedings, wherein the AO has made a specific query to substantiate the claim of exemption u/s.10(23C)(iiiab)/(aaiiad) of the Act. In response to which, the assessee has filed its reply vide letter dated 16.05.2012 [placed at paper book, page 3 and 4] wherein vide point no. 8, it has been explained that the assessee is an educational institution imparting education under the different courses and program, substantively/ wholly financed by the Government, therefore it is well covered for exemption u/s.10(23C)(iiiab) which stipulates that any university or educational institution existing solely for educational purpose and not for the purpose of profit and which is wholly or substantively financed by the Government. Therefore, it was contended that point No. 9, 10 and 11 of impugned notice under section 142(1) were not applicable. Therefore, the question of allowability of exemption u/s.10(23C)(iiiab) was duly complied with by the assessee and the ld.AO in his original assessment order passed u/s.143(3) dated 23.11.2012 has given his clear opinion duly accepting the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. Similarly, the Hon ble Delhi High Court in the case of CIT Vs. Simbhaoli Sugar Mills Ltd. [2011] 333 ITR 470 (Delhi) held that the assessee having made complete disclosure of particulars before the AO in the assessment proceedings u/s.143 (3), reassessment proceedings u/s.147 could not be initiated beyond the period of four years, merely on the basis of internal audit report. Since, in the case of assessee, the particulars were already available before the AO which were examined by him, hence, the assessee had made complete disclosure of the particulars during the course of the assessment proceedings u/s.143 (3), therefore, reopening on the basis of Revenue audit objection is not permissible in law as per the ratio laid down by the Hon ble jurisdictional Delhi High Court. Similarly, the ld.Counsel has placed reliance on the decision of Hon ble Jurisdictional High Court in the case of CIT-8 Vs. India Iron Steel Company Ltd., [ITA No.88/2015 dated 13.02.2015] wherein placing reliance on the decision of Hon ble Delhi High Court in the case of CIT Vs. Simbhaoli Sugar Mills Ltd., (supra) and after applying the ratio of judgement of Hon`ble Supreme Court in the case of CIT vs. Kelvi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12.10.2014 which is after the date of assessment was under consideration, therefore, the said Rule 2BBB is not applicable for the year under consideration. In view of these facts, reopening based on this reason is also not valid. The ld.Counsel has placed reliance on the following case laws in support of this contention: CIT vs. Deshiya Vidya Shala Samithi, ITA No.1133 of 2008, Karnataka HC Jat Education Society vs. ITO, ITA No.2542 25463/Del/201, ITAT Delhi CIT Vs. Jat Education Society, (2016) 383 ITR 0355 P H HC-41% Director of Income Tax (Exemption) Vs. Dhamapakasha Rajakarya Prasakta, ITA No.232, 235, 237 251/2009, (2015) 372 ITR 0307, Karnataka HC CIT Vs. Indian Institute of Management, ITA No.529 of 2008, Karnataka HC ACIT Vs. Amar Shaheed Baba Ajit Singh Jujhar Singh Memorial College, ITA no.1065/chd/2011, dated 20.0.2016, ITAT Delhi 12. Per contra, the ld.CIT (DR) submitted that the AO has failed to examine the case of the assessee that whether the grant received from state government were substantial a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) (iiiab) of the I. T. Act, 1961. The assessee filed a written reply received on 21.11.2012, placed on record, contending, inter-alia, therein that it is an educational institution registered under Societies Registration Act, 1860 and solely exists for charitable purposes to run an educational institution. It was further stated that the institution is substantially financed by the Govt. of Haryana and complying with all the requirement as laid down under the section. Hence, income of the institution is exempt under section 10(23C) (iiiab) of IT Act, 1961. I have carefully considered the claim of the assessee. The institution solely exists for educational purposes and not for purpose of profit. The income is, thereof, exempt under section 10(23C) (iiiab) of the Act. Total income declared at NIL by the assessee is, therefore, accepted. 15. This fact of examination and disclosure of information is further supported by the reply furnished by the assessee in response to notice u/s. 142(1) dated 03.02.2012 vide letter dated 16.05.2012 [placed at paper book page no. 3 and 4] and letter dated 21.11.2012 [placed at paper book, page no. 5 to 7]. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case, there is no new tangible material, which had come into the possession of the AO, therefore, reopening on the same material amounts to mere change of opinion, which is not permissible under the law. Similarly, the ld.Counsel has placed reliance in the case of Oriental Insurance Company Vs. CIT [2015] 378 ITR 421 (Delhi) wherein it was held that it cannot be disputed that the exemption claimed by the AO in respect of the profit on sale /redemption of investment was duly disclosed and the AO has also opined on the merits of taxability of profits of sale / redemption of investment. The income from profit on sale/redemption of investments is now sought to be taxed as income, which had escaped assessment. Thus, in our view, clearly represents a change in the opinion with regard to the taxability of the income in question. It was well settled that the power under Section 147 of the Act is not a power of review but a power to reassess. Permitting reopening of assessment on a change of opinion as to the taxability of the income of the Assessee is, thus, outside the scope of Section 147. 17. We further find that the reopening has been done in the present ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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