9911796707
TMI Blog2023 (10) TMI 1501X X X X Extracts X X X X X X X X Extracts X X X X ..... s appeal is whether the Ld. CIT(A) is erred in holding the reopening of the assessment is bad in law, without appreciating the fact that the Revenue has reopened the case based on some materials/information available, which is within the meaning of clause (ca) of explanation 2 of section 147 of the Act and also as held by the Apex Court's judgment in the case of CIT Vs. PVS Beedies Pvt. Ltd. reported in 237 ITR 13 (SC). 3. The brief facts of the case, the assessee filed its Return of Income for the Assessment Year 2008-09 on 26.09.2008 declaring total loss at Rs. 67,90,429/-. Regular assessment u/s. 143(3) of the Act was completed on 27.09.2010 determining the total loss at Rs. 61,61,237/- and Minimum Alternate Tax was charged u/s. 115JB of the Act on the book profit of Rs. 1,80,382/-. Subsequently, the assessment was reopened by issuing notice u/s. 148 dated 27.02.2015 by recording the reasons that the assessee's claim of additional depreciation on Spare Parts of machinery which are not eligible to be allowed and thereby the income chargeable to tax in respect of Rs. 7,74,069/- has escaped assessment for the Assessment Year 2008-09 within the meaning of clause (c) of Explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year cannot be held to be valid on the basis of the judicial pronouncement relied upon by the appellant in its submission as reproduced above. Hence, the reopening of the assessment is held to be bad in law. Since the reopening of the assessment has itself been held bad in law, hence the merit of the addition made in the reassessment order is not required to be adjudicated. Hence this ground of appeal is not adjudicated." 5. Aggrieved against the same, the Revenue is in appeal before us. Ld. Sr. D.R. Ms. Neeju Gupta appearing for the Revenue supported the order passed by the Assessing Officer and held that this being the Revenue Audit objection case, following Supreme Court Judgment in the case of CIT Vs. PVS Beedies Pvt. Ltd. reported in 237 ITR 13 (SC) reopening of assessment in valid in law. The Ld. CIT(A) ought not to have held that the reopening of assessment is bad in law. More particularly, the assessee has claimed excessive deduction (additional depreciation) in the Return of Income as per clause (ca) of explanation 2 to section 147 of the Act. 6. Per contra, the Ld. Counsel Ms. Amrin Pathan appearing for the assessee drawn our attention to the 1st proviso to section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aped from assessment, on the claim of additional depreciation. Thus there is no failure on the part of the assessee in truly and fully disclosing the income filed by the assessee. However the Assessing Officer proceeded to reopen the assessment based on the same materials, which is available before him after the period of 4 years. Therefore in our considered opinion, when there is no failure on the part of the assessee in fully and truly disclosing all materials fact before the Assessing Officer, he has no jurisdiction to reopen the assessment beyond the period of 4 years as per 1st proviso to section 147 of the Income Tax Act. Further in the reasons recorded by the Ld. A.O. it is found that the assessee filed a loss return of Rs. 67,90,429/- and regular assessment was completed u/s. 143(3) determining the loss at Rs. 61,61,237/-. It is thereafter the assessment reopened on the ground that additional depreciation claimed on spare parts of Plant and Machinery. 7.2. From the reasons recorded by the A.O., it clearly reflects that the same are based on the profit and loss account and balance sheet field by the assessee, which were very much available before the Assessing Officer at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome from assessment. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to section 147 of the Act, as quoted hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987. Parliament not only deleted the words "reason to believe" but also inserted the word "opinion" in section 147 of the Act. However, on receipt of representations from the Companies against omission of the words "reason to believe", Parliament re-introduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the Assessing Officer." 7.3. Further the Full Bench judgment of the Delhi High Court in the case of CIT Vs. Kelvinator of India Ltd. (123 Taxmann.com 433) clearly held that the Assessing Officer does not have any jurisdiction to review his own order, his jurisdiction is confined only to rectification of mistake as contained in section 154 of the Act, that too "mistake apparent on record" and not on debatable issues. Thus the only remedy left with the department is to invoke Revision proceedings u/s. 263 of the Act, to revise the assessment order by the Commissioner of Income Tax on the ground that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax has escaped assessment. However, as held by this Court in case of Adani Exports v. Dy CIT [1999] 240 ITR 224 and several times repeated by the Supreme Court later, reopening cannot be resorted to under the insistence of the audit party, particularly when the Assessing Officer holds a contrary belief. From this angle, we have perused the original files and do not find that the Assessing Officer independently believed that the audit note or the audit objection was otherwise valid. 7. Such being the position, on these two grounds, impugned notice is set aside. Petition is allowed and disposed of." 9. Respectfully following the above judicial precedents, we have no hesitation in holding that when there is no failure on the part of the assessee in disclosing the income and No new tangible material on record, the reopening of assessment after 4 years period amounts to "change of opinion" only. Therefore the reopening of assessment invalid in law. Thus the finding arrived by the Ld. CIT(A) does not require any interference. Therefore the grounds raised by the Revenue is devoid of merits and the same is hereby dismissed. 10. In the result, the appeal filed by the Revenue is here ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
