TMI Blog2022 (1) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... ably believe that income had escaped assessment. The basis of his belief must be the law of which he has now become aware. The opinion rendered by the audit party in regard to the law cannot, for the purpose of such belief, add to or colour the significance of such law. Therefore, the true evaluation of the law in its bearing on the assessment must be made directly and solely by the Income Tax Officer. It is not at all a case that petitioner has not disclosed anything in his response. Petitioner had given the full particulars. The stand taken by petitioner was also accepted by respondents on merits. The Assessing Officer even disagreed with the audit objections but on second thought, to the objections from the auditors he has re-opened the assessment. In our view, re-opening of the assessment without any basis and merely change of opinion is not permissible while exercising the powers under Section 147 read with Section 148 of the Act. We have no option but to allow this petition - K.R. SHRIRAM R.N. LADDHA, JJ. Mr. Percy Pardiwalla, Senior Advocate along with Mr. Nitesh Joshi, Mr. Prakash Shah and Mr. Jas Sanghavi i/b. PDS Legal for Petitioner. Mr. Suresh Kum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Bennett Coleman Co. Ltd. (b) CIT s Charge : PCIT-1, Mumbai 2 (a) Asstts. Yrs. To which the audit objection relates : 2015-16 (b) Accounting years of the assessee : 2014-15 (c) Date of filing of return (where relevant) : 30.03.2017 (d) Date of assessment / other order (if any) and section under which the assessment / other order was made : Assessment u/s. 143(3) dated 30.12.2018 (e) Total income returned (where applicable) : Total income of ₹ 1355,59,25,070/- Current Year loss of ₹ 343,82,26,992/- (f) Total income assessed (where applicable) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appointed date 1st April 2014 as approved by the Honorable Bombay high Court vide its order dated January 16, 2015. As per the Scheme, the assets and liabilities of the demerged undertaking ( Times Now English Channel) have been transferred to and vested in the Assessee Company with effect from 1st April, 2014. The Financial Statements for the year ended 31st March 2015 are prepared from the books of account giving effect to the said Scheme. Accordingly, the return of income has been prepared giving effect to the above scheme. Copy of demerger scheme and High Court order is attached for your reference. 2. Section 72A of the Act contains provisions relating to carry forward losses and set-off of accumulated losses and unabsorbed depreciation in cases of amalgamation, demerger, etc. Specifically, section 72A(4) of the Act deals with demerger, which reads as under: (4) Notwithstanding anything contained in any other provisions of this Act, in the case of a demerger, the accumulated loss and the allowance for unabsorbed depreciation of the demerged company shall: (a) where such loss or unabsorbed depreciation is directly relatable to the undertakings transf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in compliance to the Indian Accounting Standards specified in Annexure to the Companies (Indian Accounting Standards) Rules, 2015; (iv) the resulting company issues, inconsideration of the demerger, its shares to the shareholders of the demerged company on a proportionate basis except where the resulting company itself is a shareholder of the demerged company; (v) the shareholders holding not less than three-fourths in value of the shares in the demerged company (other than shares already held therein immediately before the demerger, or by a nominee for, the resulting company or, its subsidiary) become shareholders of the resulting company or companies by virtue of the demerger, Otherwise than as a result of the acquisition of the property or assets of the demerged company or any undertaking thereof by the resulting company; (vi) the transfer of the undertaking is on a going concern basis; (vii) the demerger is in accordance with the conditions, if any, notified under subsection (5) of section 72A by the Central Government in this behalf. Further Explanation 1 clarifies that undertaking shall include any part of an undertaking, or a uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : No sd/- (NEERAJ KUMAR AGARWAL) ACIT-1(1)(1) Mumbai sd/- (PANKAJ KUMAR) Addl.Com.of Income-tax-1(1) Mumbai sd/- (ANAND KUMAR) Chief Commissioner of Income Tax (OSD) in charge of PCIT-1, Mumbai 4. Therefore, the said Mr. Neeraj Kumar Agarwal has, on or about 19th February 2021, opined that petitioner has claimed and has been correctly allowed the set-off of business loss and unabsorbed depreciation pertaining to Times Now business, which was demerged from Times Global Broadcasting Company Limited into petitioner as per the provisions of Section 72A(4) and not as per the provisions of Section 72A(1) as mentioned in the audit observation sheet. He has not accepted the audit objection. Strangely, in less than 45 days, the same person Mr.Neeraj Kumar Agarwal, relying on the same audit objection, states that he has reasons to believe that petitioner s income chargeable to tax has escaped assessment. Even in the reasons recorded for issuing notice under Section 148, extract of which has been provided to the petitioner vide a communication dated 20th Septemb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e would by itself make the notice fatal. From a perusal of the reasons for acceptance or non-acceptance to the audit objection given by the same Mr. Neeraj Kumar Agarwal, it is clear that the Assessing Officer was of the opinion that petitioner had claimed and had been correctly allowed the set-off of business loss and unabsorbed depreciation pertaining to Times Now business, which was demerged from Times Global Broadcasting Company Limited into petitioner as per the provisions of Section 72A(4) and not as per the provisions of Section 72A(1) as mentioned in the audit observations sheet. The same Assessing Officer has not accepted the objections. From this it is quite clear that the Assessing Officer had to issue notice on the ground of direction issued by the audit party and not on his personal satisfaction which is not permissible under law. A similar issue was considered by the Apex Court in M/s. Larson Toubro Limited Vs. State of Jharkhand (2017) 13 SCC 780. A Division Bench of this Court in Commissioner of Income Tax (LTU) Vs. Reliance Industries Limited [2016] 382 ITR 574 (Bom) has also taken a similar view. A Division bench of this Court in IL and FS Investment Managers ..... X X X X Extracts X X X X X X X X Extracts X X X X
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