TMI Blog2024 (1) TMI 1139X X X X Extracts X X X X X X X X Extracts X X X X ..... ry raised was a subject of consideration of the AO while completing the assessment . It is not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query itself. This Court in its decision in the matter of Aroni Commercials Limited [ 2014 (2) TMI 659 - BOMBAY HIGH COURT] has expounded the law in this regard. In the present case, the queries raised by the AO in the course of the original assessing proceedings followed by replies given by the Petitioner clearly show that the entire material was before the AO and applying his mind to the said material, the AO has passed the Assessment Order dated 20th July 2018. The statement of accounts regarding details of expenses and investment relating to earning of exempt income was accepted by the AO. The letter dated 4th August 2017 issued by Petitioner alongwith the financial statements, on record indicates that all queries raised by the AO by its letter dated 19th July 2017 were answered. In the Assessment Orders u/s 143(3) of the Income Tax Act, 1961 for AY 2012-13, AY 2013-14 AY 2014-15 the returned income was accepted as assessed income and there were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details and documents as sought by the AO followed by letters dated 2nd July 2018 and 16th July 2018 specifically providing party wise details of expenses and details of other investments as required by the AO. Relying upon the information provided by Petitioner, an assessment order dated 20th July 2018 was passed under Section 143(3) of the Act determining the total income of Petitioner to be Rs. 123,38,96,585/-. Petitioner sought rectification of an error apparent on record in the assessment order and the AO passed the said order under Section 154 r/w Section 143(3) of the Act and granted credit of tax deducted at source. 5. The AO issued a notice dated 31st March 2021 under Section 148 of the Act stating that the AO had reasons to believe that Petitioner s income for AY 2016-17 has escaped assessment. While filing the return of income on 24th April 2021, Petitioner also requested the AO to furnish a copy of the reasons recorded for reopening the assessment. The reasons were provided by notice dated 22nd November 2021 to which Petitioner took objections, but the objections came to be rejected by order dated 21st January 2022. It is this order, which is assailed by Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts and not inferential facts. (7) The notice under Section 148 of the Act is not digitally signed by the AO and the sanction given by the officer concerned is not a proper sanction. Petitioner thus, urges us to quash and set aside the order and the notice impugned herein. 8. Mr. Akhileshwar Sharma appears for the Revenue and contests the petition on merits. He contends that Petitioner has made investments from a common pool of funds and incurred common administrative and other expenditure, debiting it to the P L Account thereby attracting the provisions of Section 14A of the Act. He states that expenses attributable to exempt income worked out in accordance with Rule 8D are to be disallowed in view of CBDT circular dated 11th February 2014. To buttress his point, he places reliance upon the decision of the Income Tax Appellate Tribunal ( ITAT ), Special Bench, Mumbai in the case of Daga Capital Management Private Limited 117 ITD 169 (Mumbai) and also on the decision of this Court in the case of Godrej Boyce Manufacturing Co. Limited v. Deputy Commissioner of Income Tax, Range 10(2), Mumbai and Anr. 2 ITXA No.626 of 2010 in WP No. 785 of 2010 (Unreported). H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to record the consideration bestowed by him on all issues raised by him during the assessment proceeding even where he is satisfied then it would be impossible for the Assessing Officer to complete all the assessments which are required to be scrutinized by him under Section 143(3) of the Act. Moreover, one must not forget that the manner in which an assessment order is to be drafted is the sole domain of the Assessing Officer and it is not open to an assessee to insist that the assessment order must record all the questions raised and the satisfaction in respect thereof of the Assessing Officer. The only requirement is that the Assessing Officer ought to have considered the objection now raised in the grounds for issuing notice under Section 148 of the Act, during the original assessment proceedings. There can be no doubt in the present facts as evidenced by a letter dated 8 September 2012 the very issue of taxability of sale of shares under the head capital gain or the head profits and gains from business was a subject matter of consideration by the Assessing Officer during the original assessment proceedings leading to an order dated 12 October 2010. It would therefore, follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice under Section 147 of the Act is called for. In the present case, the queries raised by the AO in the course of the original assessing proceedings followed by replies given by the Petitioner clearly show that the entire material was before the AO and applying his mind to the said material, the AO has passed the Assessment Order dated 20th July 2018. The statement of accounts regarding details of expenses and investment relating to earning of exempt income was accepted by the AO. The letter dated 4th August 2017 issued by Petitioner alongwith the financial statements, on record indicates that all queries raised by the AO by its letter dated 19th July 2017 were answered. Similarly, paragraphs 7, 9 12 of letter dated 20th June 2018 of Petitioner in response to a letter dated 10th May 2018 issued by the AO under Section 142(1) of the Act read as thus, 7. In Notice your good self have asked for details of expenses incurred in relation to earn exempt income. In this regard, the company had not earned any exempt income during the year and hence disallowance of expenses as per section 14A r.w.r 8D is not applicable. Further the company had Reserves of Rs. 1111.78 crores and Shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f issuance of original assessment order on the same information which was within the knowledge of the AO even on that date. 15. Mr. Sharma s contention regarding reopening of assessment on the basis of an audit objection is only to be rejected for the very reason that the said ground has been admittedly taken for the very first time in the affidavit-in-reply and was not taken in the reasons to believe and never communicated to Petitioner in any of the correspondence between the parties. 16. The reasons to believe forming part of Section 147 of the Act in this case, clearly points to the fact that the reopening of assessment was based on the information accessible by the AO. There is no tangible material available with the AO to justify reopening of assessment of income. Considering all the facts in the present matter and the settled legal position, we have no hesitation in holding that the reopening of assessment of Petitioner s income by the AO is only on the basis of a change in his opinion, which is impermissible in law. Petition thus deserves to be allowed. 17. Rule is made absolute in terms of prayer clause (a), which reads as thus, a. this Hon ble Court may be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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