TaxTMI 
TaxTMI 
2019 (7) TMI 1735
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....ned Counsel for the assessee drew our attention towards revised application filed under rule 27 of the Income Tax (Appellate Tribunal) Rules dated 30.1.2019 and by virtue of which the assessee raised the following two grounds: - "i. The learned CIT(A) erred in upholding reopening of assessment without appreciating that learned Assessing Officer had no reason to believe that income had escaped assessment and the reopening constitutes change of opinion since application money was enquired into at the time of original assessment proceedings and hence reopening is bad in law. ii. The learned CIT(A) erred in upholding reopening of assessment without appreciating that reopening is bad in law as same was not accordance with the mandatory procedure prescribed by the Supreme Court in GKN Driveshaft (India) Ltd. vs. ITO (2003) 259 ITR 19 (SC) since notice under section 142 was issued before the recorded reasons were issued and hence reopening is bad in law." 3. The learned Counsel for the stated that this issue has been raised before CIT(A) and CIT(A) has dismissed this issue of reopening vide para 5.7 as under: - "5.7 Coming to the grounds of appeal, ground nos....
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..... Hence, according to AO, the income to the extent of an amount of share premium receipt over and above, the intrinsic value of the share has escaped assessment. The AO completed the reassessment and made addition of share premium as unexplained and unsubstantiated as the genuineness and nature thereof. The AO invoked the provisions of section 68 of the Act for making this addition of the sum of Rs. 2,95,10,000/-. Aggrieved assessee preferred appeal before the CIT(A). 7. The CIT(A) confirmed the assumption of jurisdiction by the AO on reopening under section 147 read with section 148 of the Act but deleted the additions on merits. 8. Now the assessee has raised this issue under Rule 27 i.e. the issue decided by the CIT(A) against the assessee on reopening of assessment. Learned Counsel for the assessee before us stated that the reopening is bad in law for the reason that the AO had no reason to believe that income had escaped the assessment and the reopening constitutes change of opinion since original assessment was completed under section 143(3) of the Act and the issue of share application money was specifically enquired into by the AO at the time of original assessment pr....
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....been brought on record for reopening of the assessment by the Assessing Officer. Learned Counsel for the assessee took us through the reasons recorded and argued that the AO's entire premises is regarding justification of share premium over and above the intrinsic value of the shares and the genuineness of share premium, creditworthiness of the parties and capacity of the party is not in doubt. According to learned Counsel, the AO wanted, as is clear from the reasons recorded, that the addition is to be made under section 56(2)(viib) of the Act. But according to learned Counsel, the provisions of Section 56(2) is brought on statute book with effect from 1.4.2013 i.e. for and from assessment year 2013-14 and not for the relevant assessment year 2009-10, which is the assessment year in the present appeal. Learned Counsel for the assessee also drew our attention to the details filed before AO during the course of original assessment proceedings and he specifically drew our attention to page 28 of the assessee's paper book wherein vide letter dated 17.12.2011 (the assessment was completed under section 143(3) originally on 19.12.2011) the details of share premium account including the ....
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....ourse of original assessment proceedings and noted that the assessee vide letter dated 17.12.2011 has filed complete details of share premium account and also the valuation report of the assessee company valuing the share premium at Rs. 6400/- per share. We noted that the AO during the course of original assessment proceedings has gone into the following. "i. Valuation report as per Rule 11UA. ii. Share Premium Ledger account, Bank Statement of Assessee showing transaction of Share Premium. iii. IT Acknowledgments and Confirmations from parties. iv. Audit Reports, Balance Sheets and P & L A/c of parties from whom such Share Premium is received." 13. We further noted that the original assessment was passed under section 143(3) of the Act after perusal of the documents as required by the AO with respect to issue of share subscription money received after proper application of mind. We noted that the AO had called for assessee's explanation on issue, which is in his opinion needed consideration and only after verification of details passed the original assessment order. In view of the above, once an assessment is completed under section 143(3) of....
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....0 ITR 561 the Supreme Court has held that the wide as the power under section 147 is after 1.4.1989 a mere change of opinion cannot justify the reopening of an assessment and there must be tangible material before the AO before he proceeds to exercise his powers under section 147. In the judgment of this Court in German Remedies this Court, while setting aside the exercise of the power, adverted to the circumstance that the very same issue which was sought to be agitated by the AO had been concluded by a judgment of the Tribunal for an earlier assessment year. This Court deplored the conduct of the Assessing Officer in refusing to follow a binding decision of the Tribunal. The same view has been reiterated in the judgment of a Division Bench of this Court in Asteroids Trading & Investments (P).) Ltd. vs. Dy. CIT [2009] 308 ITR 190. 12. The Assessing Officer, in his reasons for reopening the assessment adverts to the circumstance that the assessee paid dividend tax after 1.4.2003 under section 115-O. It is on this basis that the inference is drawn that the assessee has forfeited the right to claim a deduction under section 80M. The reasons which have been recorded by the As....