TaxTMI 
TaxTMI 
2025 (8) TMI 1376
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....re-opening of the assessment on a re-appraisal of facts already considered in the original assessment. The service tax return were called for and examined during the original assessment and an addition of Rs. 65,708 was made in the said assessment. No new facts were available and as per reasons recorded for re-opening, the same was made on a re appraisal of facts already on record during the original assessment. The re-opening of the assessment is thus on a mere change of opinion, which Commissioner of Income Tax (Appeals) has failed to take note of and thus not followed the various Supreme Court decisions in this regard 3. Commissioner of Income Tax (Appeals) has erred in rejecting the argument of the appellant that the approval was granted by the Joint Commissioner of Income Tax without application of mind. As per paragraph 11(a) of reasons recorded, the AO has clearly mentioned that it was on verification of records it was observed there was omission of turnover when compared to service tax return. The undisclosed turnover represented expenditure on which service tax was paid on reverse charge basis on the expenditure debited to profit and loss account and it was not a ....
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.... 4. We have heard both the sides. The Assessee has, inter alia, challenged the re-assessment proceedings on the ground that reassessment proceedings under Section 147 of the Act have been initiated on the ground of mere change of opinion after examining the material which already formed part of the assessment record. Per contra, the stand taken by the Revenue is that the income liable to tax had escaped assessment and, therefore, the Assessing Officer was justified in initiating the re-assessment proceedings. The reassessment proceedings were initiated on the basis of tangible material. 5. On perusal of the record it emerges that assessment under Section 143(3) of the Act was framed on the Assessee vide Assessment Order, dated 28/12/2016. Subsequently, the Assessing Officer recorded the following reasons for reopening the assessment: "(a) Subsequently on verifying the records it was found that a sum of Rs. 2,82,82,304/-included in the turnover was omitted to be included in the P&L account. The Assessee is an authorised dealer for sales and service of Hyundai Cars. One of the reasons for selection the case for scrutiny assessment was "Higher turnover reported in Servi....
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....etter dated 2.5.2019 We are in receipt of your notice dated 2.5.2019 enclosing reasons recorded for re-opening of the assessment which was completed after detailed discussion u/s 143(3) of the Act on the ground that the difference in turnover of Rs. 2,82,82,304 as per service tax return and profit and loss account represents income escaped assessment. We wish to bring to your attention that the service tax return comprises of not only income on which service tax is paid, but also certain expenses on which service tax is paid on reverse charge basis. The alleged difference in turnover is only account of expenditure included in service tax return. The reconciliation of the figures as per profit and loss account and service tax return is enclosed herewith. In this connection, we may bring to your attention that the reconciliation of turnover as per profit and loss account and service tax return was discussed in detail during the assessment over several hearings and we had furnished explanations vide our letters 1100/2106 dated 11.8.2016, 1181/2016 dated 30.8.2016, 1748/2016 dated 20.12.2016 and 1765/2016 dated 21.12.2016. In the assessment order, difference ....
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....e Act, has recorded following findings in this regard: "3. Difference in Turnover between Service tax return and Return of income: On a perusal of submissions, it was seen that there was a difference in the Service tax return compared with the Return of income. The Assessee was asked to clarify the difference. The Assessee has filed a Service tax return admitting service income of Rs. 32,77,81,711/- as against the service income in the books of Rs. 31,83,92,428/-. Vide letter dated 30/08/2016, the Assessee 's authorized representative stated that a sum of Rs. 93,23,575/- representing free service provided as per Dealer agreement was included in the Service tax return even though no income has been realized either from the beneficiary customer or from the manufacturer. However, the Assessee was not able to clarify on the further difference of Rs. 65,708/-, which is a short admission in the return of income. In the absence of any explanation provided, the same is added to the income of the Assessee." Thus, after examining the issue of difference in turnover, the Assessing Officer made addition of INR.65,708/- in the hands of the Assessee against which the Ass....