TaxTMI 
TaxTMI 
2010 (2) TMI 725
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....ncome-tax (Appeals) erred in law in not quashing the assessment order dated October 4, 2007 passed by the Assessing Officer under section 147 of the Income-tax Act, 1961 ('the Act') despite holding that the same was initiated on the basis of change of opinion, which is impermissible and beyond jurisdiction under the section. 1.1 That the Commissioner of Income-tax (Appeals) erred on facts and in law in not holding that reassessment order under section 147 if the Act was beyond jurisdiction as the same was initiated on the basis of audit objections/observations without any independent satisfaction reached by the Assessing Officer. The appellant craves leave to add, alter, amend or vary from the aforesaid grounds of appeal before or at the time of hearing." The cross-objections are belatedly filed by 68 days. An application dated August 31, 2009 is on record praying for condonation of delay. It is submitted in the application that the assessee is a public limited company. The appeal was filed by the Revenue against the order of the Commissioner of Income-tax (Appeals) dated November 12, 2008. The appeal filed by the Revenue was intimated to the assessee on Apr....
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.... other hand, the learned Departmental representative opposed the submission of the assessee regarding condonation of delay. The facts relating to the ground raised by the Revenue briefly stated are as under: The return of income for the assessment year 2002-03 was filed by the assessee on October 31, 2002 at a net loss of Rs.12,85,38,352. Assessment under section 143(3) was completed on March 28, 2005 at nil income. Thereafter reassessment proceedings were initiated by issue of notice under section 148 on March 30, 2007. In the reassessment proceedings, the asses-see was asked to explain as to why interest amounting to Rs.1,67,20,315 waived during a scheme of restructuring proposal should not be added to the income of the assessee under section 41(1) of the Income-tax Act, 1961 (Act). It was submitted that company had to pay interest of Rs.2,29,83,138 to the financial institution. The total expenditure on interest to financial institution was a sum of Rs.3,04,92,049. During the year under the scheme of restructuring financial institution had waived a sum of Rs.1,67,20,315 out of outstanding interest due to them. It was submitted that no deduction in the earlier year....
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....ion 43B was claimed in that year, while sustaining a balance disallowance of Rs.70,25,685. During the previous year 2000-01, the appellant incurred interest expense of Rs.3,77,58,506 an amount of Rs.15,02,770 was paid before the due date of the filing of return for that year. The balance amount of Rs.3,62,55,736 remained unpaid as at the end of March 31, 2001. The balance unpaid amount of Rs.3,62,55,736 was disallowed under section 43B of the Act in the return of income for that year. In view of the above, the total amount unpaid as on April 1, 2001 amounting to Rs.4,32,81,421 (Rs.70,25,685 - unpaid for the year ending March 31, 2000 + Rs.3,62,55,736 - unpaid for year ending March 31, 2001) stood disallowed under section 43B of the Act in the return of income for the assessment years 2000-01 and 2001-02 respectively. It is the respectful submission of the appellant that the aforesaid amount of Rs.4,32,81,421 was reported by the auditor in annexure XI of the tax audit report for the relevant previous year against the column/query - 'liability pre-existing on first day of previous year'. Out of the aforesaid amount of Rs.4,32,81,421, the financial institutions....
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....,20,315 as a deduction in the computation of income. In view of the above facts the addition of Rs.1,67,20,315 made by the learned Assessing Officer is hereby deleted." So as it relates to invalidity of reassessment proceedings it was the case of the assessee that during the original assessment proceedings, the Assessing Officer has examined all the details and he did not make any addition. Reference was made to the documentary evidence produced by the assessee before the Assessing Officer in the original assessment proceedings and reference, inter alia, was made to the decisions of the hon'ble Delhi High Court in the case of CIT v. Kelvinator of India [2002] 256 ITR 1 and CIT v. Eicher Ltd. [2007] 294 ITR 310 (Delhi). Upon the submissions the findings of the learned Commissioner of Income-tax (Appeals) are as under: "In view of the above said submission I have observed that both the issues, viz., (i) waiver of interest liability of Rs.1,67,20,315 pertaining to the earlier year and (ii) provision for gratuity and superannuation fund, have been discussed during the proceedings of original assessment and it is these submissions and information which led the Assessing ....
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....ngs are based on change of opinion then the reassessment proceedings cannot be held valid. On the merits relying on the contention raised before the Commissioner of Income-tax (Appeals) and the Assessing Officer and findings recorded by the Commissioner of Income-tax (Appeals), it was submitted by the learned authorised representative that addition has rightly been deleted and the order of the Commissioner of Income-tax (Appeals) on that account should be upheld. We have carefully considered the rival submissions in the light of material placed before us. We have observed that after going through the submissions of the assessee and after perusing the documents placed by the assessee in the paper book, the learned Commissioner of Income-tax (Appeals) has come to a conclusion that the issue regarding liability of Rs.1,60,20,315 was considered by the Assessing Officer in the original assessment proceeding and after going through all these details the learned Commissioner of Income-tax (Appeals) has observed that the reassessment proceedings are based on mere change of opinion. In our opinion after having recorded that the reassessment was based on change of opinion, th....