TaxTMI 
TaxTMI 
TaxTMI 
2021 (3) TMI 770
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....roceedings under section 143(3) of the Act 3.2 The learned CIT (A) has failed to appreciate that the initiation of reassessment proceedings was made based on audit objection, which amounts to change of opinion, therefore the order is not sustainable under law. 3.3 The learned CIT(A) has erred in law and on facts in applying principles in the case of Kalyanji Mavji & Co vs CIT (S) 102 ITR 287 while upholding the action of the AO so far as it relates to initiation of reassessment proceedings under section 147 of the Act. 3.4 The learned CIT(A) has failed to appreciate that the order passed by the learned AO is bad in law in as much as the learned AO has passed the re-assessment order without disposing of the objection of the assessee which goes to the root of the matter and therefore the order passed by the learned AO is ought to be quashed. 3.5 The learned CIT(A) and the learned AO has erred in facts in not considering the return filed by the appellant in reply to the notice under section 148 of the Act." 3. The assessee has also filed petition for admission of additional grounds stating that certain observations of the CIT(Appeals) came to the notice of assessee pursu....
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....e AO passed the impugned assessment order u/s. 143(3) r.w.s. 147 r.w.s. 254 of the Act, the assessee filed appeal before the CIT(Appeals). The CIT(Appeals) in his ex parte dismissed all the grounds of appeal raised by the assessee. Against this, the assessee is in appeal before us. 8. The assessee's main grievance is with regard to initiation of reassessment proceeding u/s. 147 of the Act without any authority of law whatsoever. It was submitted that the assessment was reopened by recording the following reasons:- "" The assessee company has made Slump sale during the year to M/s.N.F.Wireless India Private Limited for a consideration of Rs. 13,96,91,650/-. After making adjustment towards assets and liabilities the net worth is arrived at Rs. 38,94,54,208/-. In the computation of capital gains on slump sale the assessee has reduced Rs. 38,94,54,208/-. In the computation of capital gains on slump sale the assessee has reduced Rs. 32,76,86"270/- being "goodwill allocated based on form 3cn". As per the Local Business Transfer Agreement dated: 22.07.2008, Goodwill is not treated as a part of consideration in the Business Transfer Agreement. Hence, the assessee had made a wrong claim ....
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....Taxman 294) (Delhi High Court) 10. CIT Vs Ramakrishna Hegde (326 ITR 347) (2010) (Karnataka High Court) Reassessment based on audit objection is void ab initio 11. Indian and Eastern Newspaper Society vs CIT (119 ITR 996) (Supreme Court) 12. Raj Ratna Metal Industries Ltd vs ACIT (SLP No. 7140 of 2014) (Gujarat High Court) 13. Commissioner of Income Tax -12 vs DRM Enterprises [2015] 55 Taxmann 181 (Bombay High Court) Reassessment based on audit objection is void ab initio 14. Indian and Eastern Newspaper Society vs CIT (119 ITR 996) (Supreme Court) 15. Raj Ratna Metal Industries Ltd vs ACIT (SLP No. 7140 of 2014) (Gujarat High Court) 16. Commissioner of Income Tax -12 vs DRM Enterprises [2015] 55 Taxmann 181 (Bombay High Court) Notice for reassessment proceedings issued beyond expiry of four years is time barred in case of no failure on the part of the Assessee to disclose facts 17. CIT vs Foramer France [129 Taxman 72] (Supreme Court) 18. CIT vs Corporation Bank Ltd. (2002) 254 ITR 791 (Supreme Court) 19. S Ganga Saran and Sons Pvt Ltd vs ITO & Ors 3 SCC 143 (1981) (Supreme Court) 20. Supreme Traverse (P) Ltd vs CIT & U01 323 I....
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....erits based on the material available on record. 11. Therefore, the CIT(A) passed ex parte order after considering the material on record. On the issue of re-opening the assessment, the CIT(A) observed that the condition for reopening can be stated that the Assessing Officer has reason to believe that income chargeable to tax has escaped assessment u/s.147. Where assessment u/s.143(3) or u/s.147 made earlier and reopening is done after expiry of four years from the end of the relevant assessment year reopening is possible only if income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return u/s.139 or in response to notice issued u/s.142(1) or u/s.148 or to disclose fully and truly all material facts necessary for his assessment. The expression "has reason to believe" is wider than "is satisfied" as reasons must have a live link with the formation of belief. "Information" for reopening may come from external sources or even from materials already on record or may be derived from the discovery of new and important matter or fresh facts. Word "information" would also include true and correct state of la....
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.... and Conexant India at the time of slump sale, the assessee filed appeal before the Tribunal. 14. The Tribunal vide order dated 12.8.2015 and 22.7.2015 remanded the matter back to the file of AO for fresh consideration. In the meanwhile, the AO vide notice dated 22.3.2016 initiated reassessment proceedings u/s. 148 of the Act for this AY 2009-10, pursuant to which the assessee filed return of income on 23.4.2016 requesting the AO to provide reasons for initiating reassessment proceedings. The AO vide letter dated 27.10.2016 informed the assessee that reassessment proceedings were initiated as per BTA dated 22.7.2008 between the assessee and NF India, goodwill is not treated as part of consideration, hence the assessee made a wrong claim of deducting the goodwill amounting to Rs. 32,76,86,270 from the sale consideration received. The assessee filed objections against the reassessment proceedings vide letter dated 13.12.2016 questioning the validity of the proceedings. However, the AO overlooking the objection of the assessee, passed combined assessment order giving effect to the ITAT Order dated 22.7.2015 and 12.8.2015 and the reassessment order on 29.12.2016. Against this, the ass....