2014 (8) TMI 797

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....sions of section 148 of the Act by AO. On the facts and circumstances of the appellant's case, the notice dated 15.03.2010 issued u/s 148 of the Act and the consequent order passed u/s. 143(3) r.w.s. 147 of the Act, be held to be bad in law and void ab-initio. 3. We have heard the rival submissions and perused the orders of lower authorities and materials available on record. In the instant case, the assessee filed its original return of income on 30.12.2006 wherein it claimed expenses disallowed u/s. 14A at Rs NIL. The original assessment was completed after scrutiny u/s. 143(3) and wherein the Assessing Officer for the reasons mentioned in that order estimated the amount disallowable u/s. 14A at Rs. 1,54,559/-. The assessment was reope....

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....ing not valid, the reopening was bad in law. 5. The Authorized Representative of the assessee contended that the reopening being based on change of opinion only by the succeeding Assessing Officer, the same was bad in law. For the above submission, he relied on the decision of the Hon'ble Gujarat High Court in the case of Reckitt Benckiser Healthcare India Ltd. Vs. ACIT(OCD), Circle-5 (2013) 35 taxmann.com 539. 6. On the other hand, the Departmental Representative relied upon the order of the Commissioner of Income Tax (Appeals). 7. We find that it is not in dispute that the issue of disallowance u/s. 14A was duly considered by the Assessing Officer in the original assessment and that the Assessing Officer formed a view after consi....

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....y the Assessing Officer.'' 9. The Hon'ble Delhi High Court in the case of CIT Vs. Orient Craft Ltd. (2013) 354 ITR 536 (Del) has held as under: ''There was nothing in the reasons recorded to show that any tangible material had come into the possession of the Assessing Officer subsequent to the issue of the intimation. The notice reflected an arbitrary exercise of the power conferred under section 147.'' 10. Further, the Hon'ble Jurisdictional High Court in the case of Reckitt Benckiser Healthcare India Ltd. (supra) has held as under: ''14. From the above sequence of events, it clearly emerges that the question of disallowance of expenditure or part thereof under Section 14A of the Act for earning exempt income was very much aliv....