TMI Blog2022 (7) TMI 745X X X X Extracts X X X X X X X X Extracts X X X X ..... he part of the assessee in not bringing to the knowledge of the ld. AO during the course of scrutiny assessment proceedings of Asst Year 2011-12, about the assessments of Asst Years 2009-10 and 2010-11 getting completed with huge positive income in the hands of the assessee, though on protective basis. Atleast, AO suo moto should have brought to the attention of the ld. AO in the course of original scrutiny assessment proceedings for the Asst Year 2011-12 that though he has claimed set off of brought forward loss, but the same would not be eligible in the absence of the said loss. Hence we hold that there was failure on the part of the assessee to make full and true disclosure of facts that are material for the completion of original ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ends of justice for both the parties. Accordingly, the ground raised by the revenue on merits is allowed for statistical purposes. - ITA No.1550/Mum/2021 - - - Dated:- 15-7-2022 - Shri Vikas Awasthy, Judicial Member And Shri M.Balaganesh, Accountant Member For the Revenue : Shri Brajendra Kumar For the Assessee : Shri Vimal Punmiya ORDER PER M. BALAGANESH (A.M): This appeal in ITA No.1550/Mum/2021 for A.Y.2011-12 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-49, Mumbai in appeal No.CIT(A)-49, Mumbai/10085/2018-19 dated 28/06/2021 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 05/12/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted by the ld. AO based on the Schedule CFL of the return of income containing the details of carry forward of losses. Later the ld. AO observed that on verification of records for Asst Years 2009-10 and 2010-11, the business income of the assessee was assessed at Rs 942,05,34,829/- and Rs 198,83,73,570/- respectively under scrutiny assessment. Thus, there was no loss available to the assessee for set off and carry forward. In view of this, the set off of brought forward of loss of Rs 66,44,338/- was sought to be withdrawn in the reopened proceedings by the ld. AO after due recording of reasons to this effect. 3.2. The assessee pleaded that the additions made in the hands of the assessee for Asst Years 2009-10 and 2010-11 were only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermined at a higher figure in a scrutiny assessment, be it on either substantive or protective basis, the ld. AO is duty bound to set off the loss with the assessed income first and after such set off, if there is no loss left out, then he has to pass an order withdrawing the benefit of carry forward of loss. Obviously, the scrutiny assessment orders of Asst Years 2009-10 and 2010-11 becomes a tangible material available with the ld. AO to come to the conclusion that income of the assessee for the Asst Year 2011-12 had escaped assessment. Moreover, when a protective addition has been made, only the recovery proceedings are to be kept in abeyance. It does not stop the ld. AO from proceeding with the application of other legal provisions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue disclosure of facts that are material for the completion of original assessment. Moreover, the reopening has been done in the instant case to address the mistake of fact rectifying the mistake of allowing wrong set off of brought forward losses which was not available with the assessee company in Asst Year 2011-12. Hence the ratio laid down by the Hon ble Supreme Court in the case of PVS Beedies reported in 237 ITR 13 (SC) would squarely come to the rescue of the revenue in the instant case. 3.6. In view of the above, we hold that the reopening has been done properly in the instant case and the ld. CIT(A) ought not to have quashed the reassessment as void abinitio. Accordingly, the Grounds raised by the revenue challenging the quash ..... X X X X Extracts X X X X X X X X Extracts X X X X
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