TaxTMI 
TaxTMI 
2021 (6) TMI 499
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.... to reopening of the assessment u/s.147. The appellant further contended these grounds that the initiation of proceedings u/s.147 was wrong as there was no omission or failure on the part of the appellant in disclosing fully and truly all material facts. It was also contended that the initiation of proceedings of Section 147 was erroneous as it involved resorting to looking at a new issue of disallowance u/s.10AA in contravention of the settled principles. Facts of the case, grounds of appeal, assessment order and submissions of the appellant were perused. It is seen that the assessment was reopened after taking approval as required. The reasons recorded for the reopening of the reassessment has taken into account the provisions of Section 10AA. The reasons includes taking into account the earlier assessment u/s.143(3) which was completed for A.Y.2008-09 on 24.11.2010. It is also seen from the assessment record that the reasons for reopening of the assessment was communicated to the appellant company vide letter dated 30.04.2015. Subsequently, the assessment i.e. 143(3) r.w.s. 147 was passed on 31.03.2016. On perusal of the assessment record for Asst. Year 2008-09....
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....he factory started its commercial production from 1.4.2007. The raw material for manufacturing polished granite slabs is granite blocks. To meet the requirement of raw material, the company is transferring granite slabs from its captive mines to factory. While preparing the financial statements of mine as on 31.3.2007 the material marked for factory i.e. Rs. 39,54,058/- was shown in the Closing stock schedule as raw materials in mine. Since the factory is 100% EOU separate books of accounts were maintained from 1.4.2007. The raw material ear marked for factory of Rs. 39,54,058/- as on 31.3.2007 was transferred to factory during the year 2007*08. In addition to this another Quantity for Rs. 42,45,107/- was also transferred to Factory during the year 2007 - 08. The receipts of the matt-~rial was recorded as inter unit transfers / purchase in the books of accounts of factory during the year 2007 - 08. 4.2 The contention of the assessee is verified and found that it is purely presentation mistake as stated by the assessee Rs. 39,54,048/- was shown in the opening stock in the schedule of cost of goods sold of HO and Mines the same was credited as inter unit transfer to processi....
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....r:w.s. 147 was passed on 31.03.2016. During the course of assessment proceedings, the objections raised by audit were looked into and the clarifications of AO are as under: 1. With regard to exemption u/s.10A, the exemption mentioned in the assessment order under sec.10A is a typographical mistake. It should be under section 10AA. The assessee is 100% EOU located in SEZ and entitled for deduction u/s 10AA. Therefore, payment of MAT is not required. A copy of the letter dt.13.08.2015 furnished during scrutiny proceedings is enclosed herewith for ready reference. 2. With regard to opening and closing stock, the assessee submitted that Rs. 39,54,048/- was shown in the opening stock in the schedule of cost of goods sold of HO and Mines. the same was credited as inter unit transfer to processing plant under sales schedule during the year 2007-08. So there is no excess debit of Rs. 39,54,048/- in the P&L account of HO and Mine. Copies of explanation submitted by the assessee are enclosed for ready reference. 4. In view of the above, the objection at para 21 of LAR cited above is not maintainable and requires to be dropped for treating as Settled. A communicatio....
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....or by him and furnished by the assessee, would like to come to a different conclusion. This clearly tantamounts to that reopening is merely on a change of opinion. Thus the reopening is merely on a change of opinion of the Assessing Officer and he should have tangible material for forming an opinion that there has been an escapement of income. 'Reason to believe' will not include mere change of opinion. Respectfully following the ratio laid down by the Delhi High Court in the case of Kelvinator of India Ltd. [2002] 256 ITR 1/123 Taxman 433, the order of the Commissioner (Appeals) in treating the reassessment made by the Assessing Officer as null and void, deserved to be upheld. An audit opinion in regard to the application or interpretation of law cannot be treated as Information for reopening the assessment under section 147(b). ITO VS Object Connect India (P) Ltd (2014) 29 ITR(T) 518 (Hyd, Trib.) In view of the ratio laid down by the Delhi High Court in the case of Usha International Ltd. (supra) it is opined that the Commissioner (Appeals) has rightly quashed the reopening of assessment made by the Assessing Officer under section 147 o....
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....purpose of securing an effective check on the assessment, collection and proper allocation of revenue. He is entitled to examine the accounts in order to ascertain whether the rules and procedures are being duly observed and he is required/ upon such examination, to submit a report. His power in respect of the audit of income-tax receipts and refunds are outlined in the Board's Circular No. 14/19/56-11, dated 28-7-1960. [Internal Audit Manual, Vol.II, p.39J. Paragraph 2 of the circular repeats the provisions of section 16 of the Comptroller and Auditor-General's (duties, Powers and Conditions of Service) Act, 1971. And paragraph 3 warns that "the audit department should not in any way substitute itself for the revenue authorities in the performance of their statutory duties". Paragraph 4 declares: "Audit does not consider it any part of its duty to pass in review the judgment exercised or the decision taken in individual cases by officers entrusted with those duties, but it must be recognized that an examination of such cases may be an important factor in judging the effectiveness of assessment procedure .... It is, however, to forming a general j....
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....n the case of Bank of Baroda vs H.C. Shrivatsava (256 ITR 385) as brought out in Para 16 of the judgement/findings are brought to note as they are on the issue judicial discipline. Para 16 of the judgement reads as follows: ''At this juncture, we cannot resist from observing that the judgement delivered by the Tribunal was very much binding on the assessing officer. The assessing officer was bound to follow the judgments in its letter and spirit. It was necessary for the judicial unity and discipline that all the authorities below the Tribunal must accept as binding the judgement of the Tribunal. The assessing officer being inferior officer vis-s-vis the Tribunal, was bound by the judgment of the Tribunal and the assessing officer should not have tried to distinguish the same on untenable grounds. In this behalf, it will not be out of" place to mention that in the hierarchical system of courts which exists in our country, ft is necessary for each lower tiers including the High Court, to accept loyally the decisions of the higher tiers. It is inevitable in hierarchical system of courts that there are decisions of the Supreme Appellate Tribunals which do not attract ....