2023 (1) TMI 281

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....4th December, 2022 in IT(SS)A No.120/Kol/2018 and cross-appeal in CO No.123/Kol/2018 for the assessment years 2009-10 and 2012-13. The revenue has raised the following substantial questions of law for consideration: (i) Whether on the facts and in the circumstances of the case and in law the learned Income Tax Appellate Tribunal erred in ignoring that transactions were beyond the realm of commercial reality and the assessee was the beneficiary of a series of false losses in all series codes, arising from synchronised transactions orchestrated by a cartel creating artificial volumes in illiquid commodities with 97% trades executed within a minute and square-off intra-day, with the solitary motive to reduce the incidence of tax ? (ii) W....

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....ble with the assessing officer on the date when the notice for reopening was issued i.e., on 31st March, 2016. The CITA allowed the appeal on merits but rejected the contentions of the assessee regarding the validity of the reopening. The revenue was on appeal before the Tribunal with regard to the findings of the CITA on the merits of the matter and the respondent/assessee filed cross-appeal as against the findings of the CITA upholding the validity of the reopening of the assessment. The learned Tribunal heard both the matters together and, at the first instance, took up for consideration the validity of the reopening proceedings and has recorded the following factual finding with regard to the assessment year 2009-10: "19. On examina....

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....nd therefore, the basic legal requirement of reopening u/s. 148 of the Act i.e. AO's formation of reasons to belief escapement of income prior to reopening of assessment was absent in the given facts of the present case. 20. For the reasons set out above, we thus hold that the AO did not comply with the requirement of law set out in Section 147/148 of the Act before reopening the assessment for AY 2009-10 originally completed u/s. 153A/143(3) of the Act dated 31.03.2015, and as a consequence thereto, the order dated 29-12-2016 passed by the AO being without jurisdiction is held to be a nullity in the eyes of law. The assessee, therefore, succeeds on this legal issue. The cross objections taken by the assessee for AY 2009-10, is thus allo....

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....ly formed reason to believe that income chargeable to tax had escaped assessment which was completed u/s 153A/143(3) of the Act on 30.-03.2015. Relying the decision of the Hon'ble Supreme Court in the case of CIT Vs. Kelvinators India Ltd. (supra) and other case laws cited (supra), we are inclined to hold that the initiation of reassessment suffered from legal infirmity since the AO in the original assessment has already taken a view after enquiry and therefore, the impugned action of AO to reopen was based upon change of opinion by the present AO without there being any tangible material or material change in the underlying facts which were already known to the AO at the time of passing of the regular assessment." On a perusal of the abo....