Appeal allowed, reassessment quashed for impermissible change of opinion.

The Tribunal allowed the appeal, quashing the reassessment proceedings under Section 147 as they were based on impermissible change of opinion. Other issues, including disallowance under Section 14A and treatment of financial charges, were not adjudicated due to the quashing of reassessment. The order was pronounced on 11th November 2014.

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Issues Involved:
1. Reopening of assessment under Section 147.
2. Disallowance under Section 14A of the Income Tax Act.
3. Validity of treating financial charges as management expenses.
4. Apportionment of administrative expenses without basis.

Issue-wise Detailed Analysis:

1. Reopening of Assessment under Section 147:
The assessee challenged the reopening of the assessment by the AO after four years, arguing it was based on a change of opinion, which is invalid and without jurisdiction. The original assessment order dated 30.11.2006 was reopened based on the belief that income had escaped assessment due to non-deduction of proportionate administrative expenses attributable to exempt dividend income. The Tribunal noted that during the original assessment proceedings, the AO had specifically queried the disallowance required under Section 14A and accepted the assessee's explanation without making any disallowance. The Tribunal held that the reopening was based on a change of opinion, which is not permissible in law, referencing the Jurisdictional High Court's decision in CIT vs. Usha International Ltd. 77 DTR (Del) (FB) 369. Consequently, the Tribunal quashed the reassessment proceedings.

2. Disallowance under Section 14A of the Income Tax Act:
The AO disallowed Rs. 1,28,66,654/- under Section 14A, attributing it to expenses incurred in relation to exempt dividend income. The assessee argued that during the original assessment, detailed submissions were made, and the AO had accepted these without making any disallowance. The Tribunal found that the AO had indeed examined the issue during the original assessment and concluded that the expenses were not related to the earning of dividend income. Thus, the Tribunal upheld the assessee's contention that the reopening was invalid as it was based on a change of opinion.

3. Validity of Treating Financial Charges as Management Expenses:
The assessee contended that the Revenue erred in treating financial charges of Rs. 7,53,06,437/- as management expenses without any basis or justification. The Tribunal noted that the original assessment order treated interest expenses and interest income as a single business activity. Given that the reassessment was quashed, the Tribunal did not further adjudicate on this ground.

4. Apportionment of Administrative Expenses without Basis:
The assessee argued against the apportionment of administrative expenses of Rs. 22,03,525/- based on receipts, stating that all details of expenses were available and none had a direct relation to tax-free income. The Tribunal, having quashed the reassessment proceedings, did not find it necessary to adjudicate this issue further.

Conclusion:
The Tribunal allowed the appeal of the assessee, quashing the reassessment proceedings initiated under Section 147 as they were based on a change of opinion, which is impermissible by law. The Tribunal did not find it necessary to adjudicate other grounds due to the quashing of the reassessment proceedings. The order was pronounced in the Open Court on 11th November 2014.

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