TaxTMI 
TaxTMI 
2021 (12) TMI 25
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.... Section 148 of the Income Tax Act, 1961 (the Act) for Assessment Year 2014-2015. Objections that Petitioner submitted to reopen the assessment have been rejected by order dated 31/10/2019. Both the notice for reopening the assessment and the order disposing of the objections of Petitioner has been challenged in this petition under Article 226 of the Constitution of India. 3. Petitioner is a Co-operative Credit Society registered under the provisions of the Multi-State Co-operative Societies Act. Petitioner filed its return of income on 11/9/2014 for Assessment Year 2014-2015, declaring total income as 'Nil" after claiming deduction under Section 80P of the Act viz., deduction towards interest income received from co-operative Banks.....
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....g any additions to the income of Petitioner. 6. On 14/3/2019, respondent No.1 issued a notice under Section 148 of the Act seeking to reopen the assessment of Petitioner for Assessment Year 2014-2015. At the request made by Petitioner, respondent No.1 supplied reasons for such reopening. Reasons supplied by respondent No.1 disclosed that deduction under Section 80P is available only on income received from co-operative Society and not from a co-operative bank. Accordingly, respondent No.1 had reason to believe that the income to the extent of deduction allowed had escaped assessment. Upon receipt of the reasons, Petitioner submitted its objections to reopening of assessment by letter dated 15/10/2019. Petitioner stated in the obje....
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....ed by Petitioner to the reopening of assessment. (iii) The issue of deduction of interest received from co-operative Banks under Section 80P of the Act was raised by respondent No.1 in the course of original assessment proceedings. After he was satisfied, he made no addition or disallowance in respect of the said issue. (iv) Specific query was raised by respondent No.1 during original proceedings by issuing notice under section 142 of the Act to show cause as to why such deductions are not to be disallowed, which was replied by Petitioner and the Assessing Officer had not dis-allowed the said deductions. (v) If the stand of Revenue is to be accepted, the sanctity attached to proceedings under Section 143(3) would ....
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....y, as per the provision of the Act, a co-operative Bank is an Urban Commercial Bank and does not fall under the term 'Cooperative Society' referred to under Section 80P(2)(d) of the Act. 11. Reading the reasons of the Assessing Officer, it is evident that there is absolutely no tangible material based on which he could have reopened assessment for the assessment year 2014-2015. It is not in dispute that Petitioner is a Multi-State Co-operative Society registered under the Multi-State Co-operative Societies Act. It is also not in dispute that the Assessing Officer raised a specific query during the original assessment proceedings by issuing notice under Section 142 of the Act calling upon Petitioner to show cause as to why deducti....
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....f opinion is removed, then in the guise of reopening the assessment, the review would take place. The concept of change of opinion has been built in the statute to check abuse of power by the Assessing Officer. The Assessing Officer has the power to reopen only when there is tangible material to come to the conclusion that there is escapement of income from the original assessment. The test of "tangible material" has been enunciated in a judgment of the Supreme Court in CIT v. Kelvinator of India Ltd. [2010] 320 ITR 561 held thus (page 564): "... one needs to give a schematic interpretation to the words 'reason to believe' failing which, we are afraid, section 147 would give arbitrary powers to the Assessing Officer to reop....