TaxTMI 
TaxTMI 
2019 (7) TMI 1218
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....and consequential proceedings u/s. 48 culminating into Asstt. Order U/s. 147/144 is without jurisdiction, illegal and unsustainable in law as well as on merits. 2. That the proceedings u/s. 147/148 are without jurisdiction and bad in law. 3. That the initiation of proceedings O/s. 147 I 148 are bad in law since the Ld. AO has already initiated proceedings u/s. 154/155 on the same reasons. 4. That under the facts and circumstances of the case, authorities below has erred in disallowing the salary paid to partners for Rs. 1,92,000/-. 5. That under the facts and circumstances of the case, authorities below has erred in disallowing the notional interest of Rs. 2,85,360/- on investment in HSIIDC Plot. 6. That Without Prejudice, no notional interest can be calculated and disallowed on the opening balance of investment in HSIIDC Plot. 7. That under the facts and circumstances of the case, both the authorities below erred in law as well on facts in sustaining the addition of Rs. 1,66,426/- being Freight and Cartage expenses for non-deduction of TDS. 8. That under the facts and circumstances of the case, both the authorities below erred in law as well on facts in sustaining th....
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....ved from the notice issued u/s 154 of the Act initially to rectify the assessment order on which no order whatsoever has been passed; that reasons recorded are mirror image of the averments made in the notice u/s 154 of the Act. However, on the other hand, ld. DR for the Revenue relied upon the order passed by the AO as well as ld. CIT (A). 7. Undisputedly, originally assessment in this case was framed u/s 143 (3) of the Act. It is also not in dispute that AO has initially issued a notice u/s 154/155 of the Act, available at pages 1 & 2 of the paper book, but when assessment record was perused in the open court, there is neither any order sheet nor final order, if any, passed consequent upon the notice issued u/s 154 of the Act. For ready perusal, notice issued u/s 154 is extracted as under:- "NOTICE UNDER SECTION 154 / 155 OF THE INCOME TAX ACT, 19611 35 OF THE WEALTH TAX ACT, 1957/34 OF THE GIFT TAX ACT, 1958. No.3828 Office of the Asstt Commissioner of Income Tax, Circle -II, Faridabad. New C.G.O. Complex, NH-IV, NIT, Faridabad. Dated: 10.01.2011 To M/s Chand Industries, 7 A, Market - 1, NIT Faridabad. Sir / Madam, The order under section 143 (3) for....
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....g charges, professional charges and salary respectively. It is therefore required to file monthwise & partywise detail of above expenses. (5) A plot has been purchased from HSIDC for a consideration of Rs. 58,80,000/- and interest amounting to Rs. 17,90,000/- has been debited to the P & L A/c. As the asset was not put to use by the assessee, the interest relating to above investment is not allowable and it should be capitalized." 8. To proceed further, it is also necessary to extract the "reasons recorded" for reopening the assessment as under :- REASONS RECORDED U/S 148(2) BEFORE ISSUE OF NOTICE U/S 148(1) OF THE INCOME TAX ACT, 1961. 1. Name of assessee M/s Chand Industry Plot No. 7A, Market-1, NIT, Faridabad 2. Assessment Year 2005-06 3. PAN AABFC8607Q 4. Status Firm REASONS Return declaring income of Rs. 10,43,724/- was filed on 31.10.2005. Assessment u/s 143(3) was completed on 13.12.2007 at total income of Rs. 13,79,270/-. It has been noticed that, 1. As per the provisions of section 184 of the Act a firm shall be assessed as a firm if the partnership is evidenced by an instrument and the individual shares of the partners are specified in that....
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....n view of the above, I have reason to believe that income chargeable to tax amounting to Rs. 58,85,621/- (1,92,000 + 2,85,360 + 1,772 + 54,06,489) has escaped assessment by reason of the failure on the' part of the assessee to disclose fully and truly all material facts necessary for his' assessment for the assessment year 2005-06. Accordingly, notice u/s 148 is being issued after obtaining necessary approval from the Ld. CIT, Faridabad." 9. Simultaneous perusal of notice issued u/s 154 of the Act and reasons recorded goes to prove that both are on the same footing which proves apparently that there was no failure on the part of the assessee to disclose fully and truly all necessary facts for computation of income and in these circumstances, reopening of assessment amounts to change of opinion which is not permissible. 10. Ld, DR for the Revenue contended that the proceedings initiated for rectification of the order were presumed to be dropped and thereafter valid reopening has been made. But we are of the considered view that when neither there is any order sheet for dropping the proceedings nor there is any final order of rectification, AO was not empowered to run paral....