TaxTMI 
TaxTMI 
2013 (7) TMI 381
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....eopened under section 147 determining the income of the assessee at Rs. 2,95,98,553/-. While completing the reassessment, the Assessing Officer disallowed deduction claimed by the assessee under section 10B and made addition towards difference in valuation of closing stock. The assessee filed appeal before the Commissioner of Income Tax (Appeals) against reopening of assessment under section 147 by the Assessing Officer. The assessee also contended that the Assessing Officer has rightly allowed deduction under section 10B while completing the original assessment. It was also contended that there was no reason to make any addition towards difference in value of closing stock. The Commissioner of Income Tax (Appeals) held that the assessment of the assessee was originally completed under section 143(3) of the Act on 1.6.2005 and the reassessment was completed on 20.08.2011, which is beyond four years from the end of the relevant assessment year. The Commissioner of Income Tax (Appeals) further held that there is no failure on the part of the assessee in disclosing fully and truly the material facts necessary for completion of assessment in respect of the claim made by the assessee un....
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....he assessee as detailed by the Assessing Officer in the assessment order and therefore the Assessing Officer is justified in reopening of the assessment under section 147. The Departmental Representative further submits that the assessee did not produce necessary details fully and truly in respect of its claims and therefore, the Assessing Officer is justified in reopening the assessment under section 147 of the Act. 4. The counsel for the assessee strongly relied on the order of the Commissioner of Income Tax (Appeals). He submits that it was the finding of the Commissioner of Income Tax (Appeals) that there was no failure on the part of the assessee in disclosing fully and truly all material facts necessary for completion of assessment. The counsel submits that the claim of the assessee under section 10B for the assessment year under consideration i.e. 2004-05 is not the first year, and it is the eighth year of its claim. Therefore, the counsel submits that the issue of whether the assessee is eligible for the claim under section 10B has been examined by the Department in the prior years and it is only a mere change of opinion and an assessment by the Assessing Officer that th....
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....pletion of the assessment, the assessment is bad in law therefore, the Commissioner of Income Tax (Appeals) is justified in holding so. The assessee has made detailed submissions before the Commissioner of Income Tax (Appeals) in the course of proceedings and after considering the submissions of the assessee which was extracted by the Commissioner of Income Tax (Appeals) in his order, concluded that there is no failure on the part of the assessee in disclosing fully and truly all material facts necessary for completion of assessment and therefore, the assessment is bad in law. While holding so, the Commissioner of Income Tax (Appeals) has observed as under:- "7. I have gone through the detailed submission filed by the AR of the appellant as well as the assessment order. With regard to income escaping assessment, the proviso to Sec.147 clearly states that - "Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such ....
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....And also in the case of CIT vs. Bhanji Lavji 79 ITR 582, the Hon'ble Supreme Court held that when the primary facts necessary for assessment are truly and fully disclosed, the Assessing Officer will not be entitled to change in opinion to commence proceedings for reassessment. 7.5 In view of the above, the action of the Assessing Officer in reopening the assessment under section 147 is bad in law and invalid. Hence, the grounds of appeal related to reopening of the assessment are allowed." 7. As could be seen from the order of the Commissioner of Income Tax (Appeals) that the Assessing Officer has not made out a case that there has been failure on the part of the assessee in disclosing all the materials that are necessary for making assessment under section 143(3). The Assessing Officer has also not brought on record any new material evidence to show that there was a failure on the part of the assessee which necessitated to reopen the assessment under section 147 and the reopening of assessment was made merely on a change of opinion and this is not permissible under the law. The Assessing Officer on a request by the assessee has furnished reasons for reopening which reads as ....