AI Drafter 
TaxTMI 
TaxTMI 
2022 (11) TMI 732
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....ny has intimated the Department only on 03.01.2013 that the company was dissolved whereas the notice u/s 148 of the I.T Act was issued on 19.10.2012. (ii) On the facts and circumstances of the case and law, the ld. CIT(A) has erred in deleting the addition made of Rs.1,86,00,000/- on account of lump-sum sale which was not offered for taxation. (iii) On the facts and circumstances of the case and law, the ld. CIT(A) has erred in deleting the addition made of Rs.2,61,180/- on account of disallowance of depreciation claimed on building which was sold by the assessee. (iv) On the facts and circumstances of the case and in law, the Ld. CIT(A), Surat ought to have upheld the order of the Assessing Officer. It is, therefore, prayed that the order of the Ld. CIT(A)-2 Surat may be set-aside and that of the Assessing Officer's order maybe restored." 2. Brief facts of the case are that assessee is a company filed its return of income for assessment year 2008-09 on 17.11.2008 declaring income of Rs.67,64,620/-. The case was selected for scrutiny and assessment was completed under section 143(3) on 19.11.2010 accepting the return of income. Subsequently, the case o....
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....eved by the reopening as well as additions in the assessment order, assessee filed an appeal before the Ld. CIT(A). Before Ld. CIT(A) the assessee filed its detailed written submission. The submission of assessee is recorded in para-5 of the order of Ld. CIT(A). On the validity of reopening under section 147, the assessee stated that assessee was a domestic company and dissolved in the year 2011, it was managed by Board of Directors, consisting of 30 Directors, whose names, PANs and addresses are available in Form ITR-6 filed for respective assessment years, during the period when the assessee-company was in existence. All the Directors of assessee-company were reputed doctors of Surat, practicing in the field of Neurology, Cardiology, Radiology, Orthopaedic and General Physician. The original return was filed on 17.11.2008 declaring income of Rs.67,64,620/-. The case was selected for scrutiny and assessment was completed under section 143(3) of the Act on 19.11.2010 in accepting the return of income. The assessment was allegedly reopened under section 147 of the Act by issuing notice under section148 on 19.10.2012. The assessment proceeding was completed under section 144 r.w.s 14....
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....by the order of Ministry of Corporate Affairs, Government of India, the copy of said order was forwarded to Chief Commissioner of Income-tax, (CCIT) Surat and to Income Tax Officer, copies of those orders were enclosed. The assessee-company vide their letter dated 12.12.2012 also intimated the Assessing Officer, copy of such letter was furnished. The assessee-company submitted that once the assessee-company was dissolved by the Ministry of Corporate Affairs, Government of India, it lost its existence. When notice under section 148 dated 19.12.2012 was issued, the assessee-company was not in existence and the order made against the non-existing entity is void ab initio. To support such submission, the assessee also relied on various case law. 6. On merit of the addition of Rs.1.86 crores as unaccounted income, the assessee explained that as per clause-3 of agreement of sale Rs.2.79 crores was paid on signing the agreement and balance consideration of Rs.1.86 crores was deferred and was to be paid upon the SSL division achieving operating profit in the range of Rs.1.18crores to 1.30 crores in First Commercial Year. Such conditions are clearly spelt out in clause-3 of the agreement....
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....ieve on his own that any income chargeable to tax has escaped assessment, even if the impugned issue was brought to notice of Assessing Officer by audit party, it could not preclude the Assessing Officer from acting on such communication as long as final opinion to take appropriate action was that of Assessing Officer and not that of audit party. The Assessing Officer in the remand report dated 29.12.2017 admitted that case was reopened on the objection of audit party. In the remand report, there is no mention that Assessing Officer applied his mind, which per se suggests that Assessing Officer have no reason to believe as to why any income has escaped assessment but the Assessing Officer merely confined to audit objection. To support, the assessee stated that reopening is not sustainable on mere on audit objection unless the Assessing Officer on his own should have formed the belief that income has escaped assessment. To support the assessee's view, the assessee relied on various case law. On the merit of addition, the assessee reiterated that business of assessee was acquired by NLDL, managed by division of Nicholas Piramal Group of Dr Ajay Piramal and Dr Swati Piramal. The detai....
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....count of audit objection. The facts corroborated the assessee's submission of reopening on the basis of change of opinion, which is not permissible. The Ld. CIT(A) thus allowed the appeal of assessee on legal grounds. Aggrieved by the order of Ld. CIT(A) the Revenue has filed present appeal before the Tribunal. 10. We have heard the submissions of learned Senior Departmental Representative (Sr-DR) for the Revenue and the learned authorised representative (ld AR) for assessee and have gone through the orders of lower authorities carefully. The ld Sr DR for the revenue submits that Ld. CIT(A) quashed the assessment order by taking view that notice under section 148 was issued on non-existent entity, if the assessee was dissolved, such fact was never communicated to the Assessing Officer. It was the duty of the assessee to intimate the Assessing Officer in writing as per under section 176(3) of the Act. Further as per under section 178 the person who has made the order of dissolution or liquidating the assessee-company has to inform the Income Tax Authority about such dissolution. No such intimation or information was sent to Assessing Officer. The Ld. CIT(A) without verifying such....
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....e case of Savita Kapila vs. ACIT (2020) 118 taxmann.com 46 (Del). 12. In alternative submissions, the ld AR for the assesse submits that reopening was passed on mere change of opinion. The ld. AR for the assessee submits that reopening was based on audit objection. The reopening based on the objection of audit report is not valid. on the submission that reopening is not valid on audit objection. Ld. AR for the assessee relied upon the decision of Hon'ble jurisdictional High Court in the case of Adani Exports. vs. DCIT (1999) 240 ITR 224 (Guj); in the case of Adani Infrastructure and Developer Pvt. Ltd. vs. ACIT (2019) 101 taxmann.com 256 (Guj). 13. On the issue that all the facts were verified and examined and accepted by Assessing Officer while passing the assessment order and that no new material or information has come to the notice of Assessing Officer and all information were available on the record of the case that reopening was change of opinion, the ld. AR for the assessee relied upon the decision of Hon'ble Apex Court in the case of CIT Vs Kalvinator of India Ltd. (2010) 320 ITR 561 (SC), 14. The Ld. AR for the assessee submits finally submits that Ld. CIT....
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....in the Assessing Officer identified two issuesi.e. (i) related to difference of sale price, which was not offered by the assessee in its return of income and the depreciation claimed of Rs.2,61,180/-. The Assessing Officer further in para-5 on his order recorded that final show cause notice issued on 26.03.2014 was served to assessee-company by affixture and that none of the notice was replied by assessee and Assessing Officer brought the difference of sale consideration of business of assessee of Rs.1.86 crores (4.65-2.79 crores) as unaccounted income of assessee and disallowed the depreciation of Rs.2,61,180/-. As recorded above, before Ld. CIT(A) the assessee filed detailed written submission, the contents of which are not repeated here for the sake of brevity. On the detailed written submissions of assessee, the Ld. CIT(A) called remand report from Assessing Officer. On the remand report, the assessee was asked to give its comments. The assessee filed his reply to the said remand report. The Ld. CIT(A) after considering the assessment order, submission of assessee, remand report filed by Assessing Officer and rejoinder of assesseeheld that reopening of case is bad in law on two....