2015 (7) TMI 764

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....material facts. 2. The Ld. CIT(A) erred on the facts and circumstances of the case and law in deleting the addition on account of repair and maintenance, building expenses and design and Act work expenses amounting to Rs. 45,51,661/-. 3. The appellant craves leave to amend, modify, alter, add or forego any ground of appeal at any time before or during the hearing of this appeal." 2. The assessee company, for AY 2004-05, filed its return of income declaring income of Rs. 10,40,11,590/- on 1-11-2004. The assessment was completed u/s 143(3) on 22-3-2005. Thereafter, AO issued notice u/s 148 on 23-3-2011 after recording following reasons: "During the year, the assessee company has shown an amount of Rs. 4,13,61,284/- as "Unsecured l....

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..... Before ld. CIT(A) the assessee assailed the reassessment proceedings initiated u/s 147 read with section 148 as being without jurisdiction and bad in law. Ld. CIT(A), after consideration of detailed submissions advanced by ld. counsel for the assessee, quashed the reassessment proceedings, mainly for following reasons: (a) Reassessment proceedings were initiated after the expiry of four years. Therefore, in view of proviso to section 147, since there was no failure on the part of the assessee to disclose fully and truly all material facts, necessary for its assessment, no reopening could be done. (b) The reasons were based on form 3CD and not on any new material. Since the assessment was completed u/s 143(3), therefore, it was a cas....

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....it report at Rs. 17,76,66,492/-, whereas in the balance-sheet it was Rs. 4,13,61,284/-. The reopening solely on the basis of different figures, appearing in the balance-sheet and in form 3CD in respect of same item, could not be done without proper application of mind before recording the reasons. The cardinal principle is that before reopening the assessment the AO should apply his mind and reach a prima facie conclusion regarding escapement of income and should not mechanically record his reasons without due application of mind. The absence of any application of mind is manifest from the fact that while making the assessment, the AO himself did not make any addition on this count. Therefore, reasons recorded on this count, were rightly no....

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....al field. . Therefore, it is evident that reopening has been done purely on the basis of change of opinion in regard to the items mentioned in the reasons recorded by AO, which is not permissible in view of the decision of Hon'ble Supreme Court in the case of CIT Vs. Kelvinator of India Ltd. 320 ITR 56, wherein it 1 has been held as under: "On going through the changes, quoted above, made to s. 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, reopening could be done under above two conditions and fulfillment of the said conditions alone conferred jurisdiction on the AO to make a back assessment, but ins. 147 of the Act (w.e.f. Ist April, 1989), ~y are given a go-by and only one condition has remained, viz., t....