TaxTMI 
TaxTMI 
2013 (5) TMI 157
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....s from the end of relevant assessment year. The Assessing Officer had recorded his reasons for issuing such a notice, which read as under :- "On verification of Form 3CD, Profit & Loss Account and various submissions in respect of rent income and food preparation charges, it is noticed that from the start of the A.Y 2007-08, the assessee has ceased himself from the restaurant business and had leased/licensed his entire assets of restaurant to other parties for which he received rents. As per terms of contracts, repair/maintenance/replacement of leased building/furniture/ACs/crockery and utensils and local taxes thereof were to be paid by lessee. Further, the assessee had received food preparation charges from lessee which were fixed amou....
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....that no income chargeable to tax had escaped assessment. 4. To enable us to examine above contentions of the petitioner, we had requested counsel for the Revenue to make available for our perusal, the original file of the petitioner-assessee. Having perused the file, we noticed that the following facts emerge : (a) Assessment for the year under consideration was originally framed on 1st July 2009. Such assessment was made after scrutiny; (b) Audit party brought following facts to the notice of the Assessing Officer :- "Scrutiny of Form 3CD, Profit and Loss Account and various submissions in respect of rent income and food preparation charges revealed that from the start of the A.Y., the assessee had ceased himself from the resta....
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....ment, we noticed that the audit party recorded as under :- "On this being pointed out the ACIT 12, Ahmedabad replied that as audit objection needs time to examine, detailed reply would be sent later. He further stated that audit objection was not acceptable as the case would be time barred in December 2010. Reply is not acceptable as remedial action has to be taken in suitable cases as prescribed by CBDT for audit observations." 5. On 8th June 2011, the Assessing Officer did not agree to the above suggestion of the audit party and wrote to the AG [Audit] stating as under :- "3. The assessee has shown in the audit report for year under consideration the nature of business "Restaurant Business". When the assessee is shown the income ....
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....ax Act, 1961. Further, the Hon'ble Court decided the issue "is assessee entitle to the full amount of depreciation u/s. 102 (vi) of income tax Act, irrespective of period of lease" it is evident that objection raised is not covered under the said judgment. Reply may be reconsidered in view of fact mentioned above and the Para." 6. Thereafter, impugned show cause notice came to be issued with supporting reasons, which we have already recorded earlier. 7. From the series of evidence, in our opinion, it stands clearly established that the Assessing Officer was under compulsion from the audit party to issue notice for reopening. This we say so because after the audit party brought the controversial issue to the notice of the Assessing Off....
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....on such communication as long as the final opinion to take appropriate action is that of the Assessing Officer and not that of the audit party. Referring to the decision in case of CIT v. P.V.S Beedies (P.) Ltd. [1999] 237 ITR 13/103 Taxman 294 (SC), it is equally well settled however that if the Assessing Officer has acted only under compulsion of the audit party and not independently, the action of re-opening would be vitiated. In a recent decision dated 14th December 2011 rendered in case of Cadila Healthcare Ltd. v. Asstt. CIT [2012] 65 DTR 385 (Guj.), the High Court had an occasion to examine such issues. It was held and observed as under :- "Under the circumstances, it clearly emerges from the record that the Assessing Officer was ....