TaxTMI 
TaxTMI 
TaxTMI 
2019 (1) TMI 1814
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....Act") relating to A.Y. 2008-2009. The assessee has also filed cross objection. 2. First, we shall decide the cross objection of the assessee i.e. CO No.334/Mum/2018, wherein the assessee has raised the following grounds :- The Respondent submits the following cross-objections are independent, separate / alternative and without prejudice to one another: 1. Reopening of the assessment is bad in law On the facts and in the circumstances of the case and in law, the Learned Commissioner of Income-tax (Appeals)-12, Mumbai ['CIT(A)'] erred in holding that all the pre-conditions necessary for assuming jurisdiction under section 147 of the Income-tax Act, 1961, had been satisfied. 2. Reopening of the assessment based on an audit o....
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.... u/s.147 of the Act by issuing the notice u/s.148 of the Act dated 28.02.2013 The assessee in the return of income filed before the authorities appended Note-4 in which it is stated that the deficit of Rs. 25,56,77,300/- was determined in accordance with Section 44 read with Rule 2 of First Schedule to the Act after considering the expenses of Rs. 12,77,50,343/- incurred prior to date of registration i.e. December 19, 2007 with IRDA. The AO on the basis of said Note recorded the reasons which are reproduced as under :- Reason for Reopening IDBI Federal Life Insurance Co. Ltd. A.Y.2008-09 "In the instant case, the assessee has offered the total income as income from insurance business only. However, while assessment, the assessing offic....
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.... 5. The assessee challenged the reopening proceedings before the CIT(A), who dismissed the technical issue raised by the assessee in a very cryptic manner by observing and holding as under :- "5. Ground of Appeal 05.1 to 5 Reopening of assessment is not bad in law since all the necessary preconditions tor issuing notice u/s.148 have been satisfied. Notice was issued by the A.O. on the fact that apparently there was concealment of income by the appellant company. Ground of Appeal Nos.1 to 5 are dismissed." 6. Ld. AR vehemently submitted before us that the assessment was reopened on the basis of audit objection which is not permissible under law. Ld.AR drew our attention to the audit objection, a copy of which is filed at page 1 titled ....
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....Act in a mechanical manner is bad in law and, therefore, reassessment proceedings should be annulled and quashed. 7. In defence of her argument, ld. AR relied on the decision of Hon'ble Delhi High Court in the case of Xerox Modicorp Ltd. Vs. DCIT, [2013] 350 ITR 308 (Delhi). Ld.AR also submitted that the facts of claim of expenses against the income has duly been stated in para 4 of the computation of total income and it was also before the AO at the time of assessment proceedings which culminated u/s.143(3) of the Act, and, thus, the AO has accepted the claim of assessee after due application of mind. Even on this count, the reassessment proceedings are bad in law as the same are based upon the change of opinion which is not permissible u....
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....5/-. 10. We have heard the rival submissions of both the parties and perused the material on record including the decisions cited by the rival parties. In order to adjudicate the whole issue, we would like to reiterate the facts of the case in the following paragraphs. 11. The undisputed facts are that there was an audit objection by the audit party in which it has been clearly stated that the assessee has claimed excess deduction to the tune of Rs. 10,22,00,275/-. The verbatim of audit objection is reproduced as under :- In the instant case, the assessee had offered the total income as income from insurance business only. However, while assessment, the assessing officer had mentioned in point no. 18 of the assessment order, that the in....
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....e AO on this issue. We find merit in the arguments of ld. AR that the there is no satisfaction by the AO and there is no application of mind and the notice has been issued in a mechanical manner, taking the audit objection verbatim in the reasons recorded by the AO for reopening the assessment. The AO has acted upon the borrowed satisfaction of the audit party, The case of the assessee is supported by the decision of Hon'ble Delhi High Court in the case of Xerox Modicorp Ltd.(supra) in which it has been held that opinion by the audit party cannot constitute a tangible material and reassessment was held to be not valid. The held portion of the Hon'ble High Court is reproduced as under :- "Held, allowing the petitions, (0 that the asses....