TaxTMI 
TaxTMI 
2022 (3) TMI 1186
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....peaking order was passed by the Assessing Officer on the objections raised by the appellant on reasons recorded for issue of notice U/s.148 in view of the decision of Hon. Supreme Court in the case of GKN Driveshafts V/s. CIT reported in (2003) 259 ITR 19. And in view of decision of jurisdictional Bombay High Court in the case of Allana Cold Storage Ltd. V/s. ITO & others reported in (2006) 287 ITR 1. 3) In the facts, circumstances & position of law learned CIT Appeals-II, Nashik erred in not annulling the re-assessment order being based on mere change of opinion on the same set of evidence on record. 4) In the facts, circumstances & position of law learned CIT Appeal-II, Nashik erred in not annulling the re-assessment order. 5) In the facts, circumstances & position of law learned CIT Appeals-II, Nashik erred in arriving at the fact that appellant had not furnished the information of share holding of its subsidiary companies. 6) In the facts, circumstances & position of law learned CIT Appeals-II, Nashik erred in holding that appellant company has not disclosed transactions with related parties & further holding that appellant company has not br....
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....ment order passed under section 143(3) r.w.s 147 of the Act dated 25.03.2014. Notice under section 148 of the Act was issued on 29.10.2012 after obtaining approval from the Competent Authority. The Assessing Officer has recorded reasons for reopening which have been mentioned on page 2 of the assessment order. Copy of the reasons recorded for reopening were provided to the assessee on 29/10/2013. The Assessment Order was passed u/s 147 r.w.s 143(3) on 25/3/2014. 4. The appellant assessee company filed an appeal before the ld.CIT(A)-2, Nashik against the said order passed under section 143 r.w.s 147 of the Act. The ld.CIT(A) passed the order on 13.01.2015. Against this order of ld.CIT(A), the appellant assessee company has filed appeal before this Tribunal. 5. At the outset, the ld.Authorised Representative(ld.AR) of the assessee explained that the Ground No.1 to 8 are legal grounds by which the appellant assessee has challenged the validity of the re-opening proceedings. 6. The ld.AR for the assessee submitted as under: 9. The reasons recorded by Assessing Officer before issuance of notice u/s 148 of I.T.Act 1961 are at Page No.127 of Paper Book wherein the learne....
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....nd advances of Rs. 98,32,727/- with relation to the persons concerned and purpose of the same. - Please furnish confirmation in respect of liabilities, outstanding as on 31.03.2008 of Rs. 35,29,69,501/-. - Please furnish confirmation of unsecured loans accepted during the year and interest debited/paid to the lenders. The said notice and questionnaire were enclosed at page no.74 and 75 of the paper books of the appellant. 8. The ld.AR submitted that the appellant furnished reply in response to notice dated 23.06.2010 on 09.08.2010. The appellant filed copy of the said reply in the paper book. The relevant part of the reply is as under: a) J.M.Cotton Ginning & Pressing Co. Pvt. Ltd. Of Rs. 7,87,40,676/-:- Extract of account in our books of accounts is enclosed at Sr. Page no.87 & 88. Further contra extract in the books of J.M.Cotton Ginning is enclosed herewith at Sr. Page NO.89 & 90 with confirmation & PAN 7 the Ward in which it is assessed. Copy of acknowledgment of return filed by J.M.Cotton Ginning and the balance sheet in which I am appearing as debtor are enclosed at Sr. Page NO.91 to 93 respectively. b) Khandesh Spg. & ....
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.... 9. The ld.AR further submitted that copy of the Annual Report, Audit Report of the assessee company was submitted during the original assessment proceedings. The said Audit Report contains Unsecured Loans taken by the appellant in Schedule-D. And also Schedule-F shows the Investments of the appellant in J.M.Cotton Ginning & Pressing Co. Pvt. Ltd. and Krishi Dhan Cattle Feeds Pvt. Ltd. The ld.AR also submitted that share holding pattern was also submitted. Therefore, the ld.AR argued that all the required details were submitted during the original assessment proceedings and the AO after studying, after applying mind have made the assessment order without any addition. Therefore, the reasons recorded for re-opening is nothing but change of opinion. The ld.AR invited our attention to the fact that all the figures mentioned in the reasons for reopening have been reproduced by the AO from the records, documents submitted during the original assessment proceedings, therefore, the ld.AR vehemently argued that it is nothing but change of opinion based on the same facts. Therefore, contended that re-assessment is bad in law as it is based on mere change of opinion. He relied on the case ....
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....of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. In the present case, the notice uls 148 for the A. Y. 2008-2009 was issued on 29.10.2012 after recording the reasons for the belief that income chargeable to tax has escaped assessment for the said A. Y. The said notice was issued within 4 years from the end of the A. Y. 2008-2009 i.e. before 31.03.2013 and, hence, there is no requirement in law to establish that income chargeable to tax has escaped assessment for the A.Y. 2008-2009 due to failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment 3.2 The assessee has in the original ground No.2 stated that the Ld. CIT(A) should have annulled the re-assessment order as no speaking order was passed by the Assessing Officer on the objections raised by the assessee on the reasons recorded for issue of notice U/S 148 in view of the decision of the Hon'ble Supreme Court in the case of GKN Driveshafts v. CIT (2003) 259 ITR 19 and the decision of the Hon'ble Bombay High Court in the case of Allana Cold Storage Ltd. v. ITO (2006) 287 ITR 1. 3.2.1 O....
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....to the assessing officer any opinion on the questions that are raised in the proposed re-assessment proceedings. Every attempt to bring to tax, income that has escaped assessment, cannot be absorbed by judicial intervention on an assumed change of opinion even in cases where the order of assessment does not address itself to a given aspect sought to be examined in the re-assessment proceedings." 12. The ld.CIT(DR) further argued that in this case, the AO has not expressed any opinion about applicability of section 2(22)(e) of the Act in the original assessment order. There is no discussion in the original assessment order regarding share holding pattern, etc., Therefore, the ld.CIT(DR) argued that one cannot say that there is change of opinion as no opinion was formed by the AO. The ld.CIT(DR) argued that relying on the Hon'ble Supreme Court decision of Tech Span India Pvt. Ltd.(supra) there is no change of opinion as in the assessment order, there is no express or implied opinion on applicability of section 2(22)(e) of the Act. The ld.CIT(DR) has also relied on the decision of Hon'ble Supreme Court in ACIT vs. Rajesh Jhaveri Stock Brokers (P.) Ltd., 291 ITR 500 (SC). 13. In ....
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....ct. Therefore, I have reason to believe that there is an escapement of income of Rs. 1,50,58,587/- (1,34,39,587 + 16,16,000) within the provisions of section 147 of the I.T.Act. 14.2 The issue in the re-opening proceeding is escapement of income under section 2(22)(e) of the Act. Let us try to understand that the facts required for Assessing Officer to determine applicability of section 2(22)(e) of the Act. 2(22)(e): any payment by a company, not being a company in which the public are substantially interested, of any sum (whether as representing a part of the assets of the company or otherwise) 5 made after the 31st day of May, 1987 , by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than ten per cent of the voting power, or to any concern, in which such shareholder is a member or a partner and in which he has a substantial interest (hereafter in this clause referred to as the said concern) or any payment by any such company on behalf, or for the individual benefit, of any such shareho....
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....rds of the original assessment. The ld.AR further pointed that in the Audit Report it is clearly mentioned that J.M.Cotton Ginning & Pressing Co. Pvt. Ltd., is subsidiary and Krishin Dhan Cattle Feeds Pvt. Ltd., is a related party. The ld.CIT(DR) has not rebutted the claim of the ld.AR of the assessee. Also, in the reasons, the AO has not claimed that it has received the information regarding shareholding of the assessee company in the lender companies after the original assessment was completed. Therefore, the prima facie, we have to accept the submission of the ld.AR of the assessee that shareholding of the appellant company in the lender company were submitted during the original assessment proceedings. D. Thus, during the original assessment proceedings, the AO was having knowledge that assessee company has taken loans from J.M.Cotton Ginning & Pressing Co. Pvt. Ltd., and Krishi Dhan Cattle Feeds Pvt. Ltd. The AO was also having knowledge about shareholding of the assessee company in these lender companies. During the original assessment proceedings, the appellant had submitted the Balance Sheets of the lenders companies.The AO had specifically asked the questions about the ....