TaxTMI 
TaxTMI 
2020 (1) TMI 1302
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....on facts and in law in dismissing the grounds regarding re-opening and reassessment proceedings. b. holding that all the conditions laid down under the law for re-opening of assessment are apparently satisfied in the case of the assessee and hence reassessment is valid in the eye of law is against the principles of natural justice erroneous, bad, both in the eye of law and on facts and legally untenable. c. holding that there is no change of opinion by the learned AO in order dated 30.11.2016 u/s. 143(3)/147 of the Act is erroneous, bad, both in the eye of law and on facts and legally untenable. d. ought to have held that the issue of notice u/s. 148 for re-opening the assessments is unjustified, erroneous, bad in law, without/lack of jurisdiction and legally untenable. e. ought to have held that the order dated 30.11.2016 U/S. 147/143(3) of the Act passed by the learned 'AO' is arbitrary, unjustified, erroneous, bad in law and legally unsustainable. 3. That it is the settled law that the Assessing Officer in proceedings U/s. 147 is obliged to first determine whether reopening is valid and only thereafter can proceed with the rea....
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....said expenses of Rs. 64,84,215/- is fully allowable u/s. 37(1) of the Act the same ought not be disallowed. f. That on the facts and in the circumstances of the case, the aforesaid expenses of Rs. 64,84,215/- ought to be fully allowed. 5. That the appellant craves leave to add, supplement, modify the grounds here-in-above at the hearing of the appeal. 3. Brief facts of the case are that the assessee filed return of income u/s. 139(1) of the Act on 29.09.2011 declaring loss of Rs. 64,84,215/-. The assessment was originally completed on 24.03.2014 u/s. u/s. 143(3) of the Act at a loss of Rs. 64,84,215/-. Thereafter show cause noticed dated 01.02.2016 after recording the reasons as under:- From the verification of assessment record, following facts are observed: a) Disallowance of expenditure; In the audited profit & loss account for the year ended 31st March, 2011, the assessee has claimed Rs. 63,15,989/- as expenditure against Income, of Rs. 2,89,894/- from interest on deposits and exchange gain, From the notes to Accounts, It is observed that: I) Investment in CESCO Under a scheme of privatization of the distribution....
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....nd disallowing a sum of Rs. 64,84,215/- for carry forward of loss to the next assessment years. 4. Against the assessment order, the assessee filed appeal challenging the reopening of the assessment as well as on merits. Ld. CIT(A) after considering the case of the assessee, dismissed the appeal of the assessee on both the counts after observing as under:- 2.1 I have considered the contention of the assessee and perused the materials on record. I have also gone through the reasons recorded by the AO before issue of notice u/s. 148. I do not agree with the assessee that the reassessment proceeding has been initiated on change of opinion. Change of opinion presupposes an opinion already formed by the AO in the original assessment on certain issues and the reassessment proceeding is started on change of such opinion on such issues. Nothing of that sort appears to have happened in the case of the assessee. The AO in the original assessment has not taken any decision consciously to allow the expenses claimed against the interest income to be taxed as income from other sources. The assessee's business has been discontinued since long and there is no business activities re....
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.... to be fully justified to disallow the expenses of Rs. 64,84,215/-. Hence, the disallowance is confirmed. 4. Ground No. 4 is general in nature and requires no consideration. 5. In the result, the appeal is dismissed. 5. Against the aforesaid observations of the CIT(A), the assessee is in further appeal before the Income Tax Appellate Tribunal. 6. Ld. AR before us submitted that the AO was not justified to reopen the case. He had no any correct information nor any tangible material enabling him to reopen the case of the assessee as per the provisions of the Section 147/148 of the Income Tax Act, 1961. The AO is also not justified that there was no change of opinion. It was also contended by ld. AR that all relevant materials were placed in the original assessment u/s. 143(3) of the Act. The AO could have examined the issue that the business of the assessee was not closed. Ld. AR drew our attention to the financial statements submitted by him and referred to the page Nos. 1 to 61 of the paper book and page nos. 1 to 26 filed in the paper book. Finally, ld. AR, to support his contentions, relied on the decision of SMC bench of this Tribunal in the case of G.N. ....
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....er held that even if there is any mistake committed by the AO while competing the assessment u/s. 143(3) of the Act, the same cannot be allowed to be taken as a basis for reopening of the assessment as it would amount of giving premium to an authority exercising qua judicial function to take the benefits of its own wrong. Therefore, as per our considered opinion and following the judicial pronouncements as cited above, we are of the view that the reopening in the case in hand is unjustified. Accordingly, we dismiss the impugned order passed by the CIT(A) and quashed the reassessment order passed by the AO in the case in hand. Since, we have quashed the reassessment order on legal issue, therefore, other grounds raised by the assessee on merits, are not being adjudicated upon. Thus, appeal of the assessee in ITA No. 68/CTK/2018 for A.Y. 2011-2012 is allowed. 9. Now, we shall take up the appeal of the assessee in ITA No. 69/CTK/2018 for A.Y. 2013-2014, wherein the assessee has raised the following grounds:- 1. That the order dated 22.11.2017 of the learned CIT(Appeals) in dismissing the appeal is against the principles of natural justice, contrary to facts, arbitrary, err....
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....Rs. 4,20,680/- ought to be fully allowed. 3. That without prejudice to Ground No. 2 above, on the facts and in the circumstances of the case, the learned Assessing Officer ought to have determined the loss for the year at Rs. 41,89,214/- (including depreciation of Rs. 21,214/-) and the AO having failed to do so and the learned CIT(Appeals) dismissing the Ground in this regard, is against the principles of natural justice, arbitrary, unjustified, wrong, erroneous and bad, both in the eye of law and on facts and legally untenable. 4. The appellant craves leave to add, supplement, modify the grounds here-in-above at the hearing of the appeal. 10. Brief facts of the case are that the assessee filed return of income on 25.09.2013 declaring total loss of Rs. 41,84,214/-. The return was processed u/s. 143(1) of the Act and later on it was selected for scrutiny u/s. 143(3) of the Act and other statutory notices were also issued to the assessee. It was noticed by the AO that there was no any business activity has been carried on by the assessee during the impugned year, therefore, the expenses debited into the profit and loss account cannot be allowed as per Section 37(....