2015 (3) TMI 152

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....nt : None ORDER The Revenue is in appeal against the order of the Income Tax Appellate Tribunal (ITAT) dated 18.06.2014 in ITA 353/Del/2013. The Revenue had preferred an appeal contending that the decision of the CIT(Appeals), cancelling the reassessment proceedings, was erroneous. The ITAT rejected the Revenue's plea and affirmed the CIT(Appeals)'s decision. The assessee, a government company,....

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....s) set aside the AO's order. In the appeal, it was noticed that the sole modification in the reassessment notice and further proceedings was the audit objections. Relying upon the precedents of the Courts, notably, CIT v. Kelvinator of India Limited 320 ITR 561, the CIT(Appeals) held that in the circumstances of the case, reassessment was not justified in law. The ITAT confirmed the CIT(Appeals)'s....

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.... order to tow the line of audit objection and to avoid any ramification therefrom reopened the assessment u/s 147 without valid reason. Once the issue was examined during the course of assessment which emerges from the record so clearly, it cannot be held to be a proper case of reopening of assessment. In view thereof, we see no infirmity in the order of CIT(A) holding the reassessment to be bad i....

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....aw is clear. In CIT v. Simbhaoli Sugar Mills Limited 2011 (333) ITR 470, the Court, after applying the ratio in Kelvinator (supra) also held that initiation of reassessment proceedings on the basis of audit report objections is impermissible. In this regard, the Court also notices the ruling in Transworld International Inc. v. JCIT 2005 (273) ITR 242 and the Supreme Court judgment in Indian and Ea....