TaxTMI 
TaxTMI 
2025 (9) TMI 1313
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.... other than the assessment records which was before him. According to the Ld.AR, the AO couldn't have reopened the assessment after four (4) years from the end of the relevant assessment year without having in his possession any tangible material [other than the original records available in the assessment record] as held by the Hon'ble Madras High Court in the case of ACIT v. Indian Syntans Investments Pvt. Ltd., in Writ Appeal No.220 of 2024 vide order dated 19.06.2025 and in the case of Devaraj Ramasamy Mani v. ACIT in Writ Appeal No.1321 of 2024 vide Order dated 17.06.2025 wherein it has been held that when the reasons for reassessment / reopening was passed entirely upon the documentation accompanying the return, and no material extraneous to that already on record, or any new evidence has been discovered by the AO, indicating income has escaped taxation; and the assessee having disclosed fully and truly all material germane to the computation of income and forms part of the return of income, then in such circumstances, escapement of income, if any, can't be attributed to the assessee [refer order of the Hon'ble High Court in the case of Indian Syntans Investments Pvt. Ltd., o....
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....iture of the company and while calculating net profit as per provision of 801A the assessee is bound to consider the proportion of these common expenditure. Hence proportionate salary of Rs. 22,41,493/- has to be deducted from the 801A income and sec 801A deduction has to be allowed to the extent of Rs. 19,63,935/- and the balance amount has to brought to tax as stated below: GROSS TOTAL INCOME 10,13,15,048 SALARY TO DIRECTOR 5,40,00,000 PERCENTAGE OF SALRY TO GTI 53.30% Hence Rs. 22,41,493/- @ 53.30% on Rs. 42,05,428/- requires to be disallowed from the 801A deduction claimed by the assessee and brought to tax. b) It was noticed from the copy of the receipt dated 20.07.2013 issued by the TNEB that the assessee had paid Rs. 61,91,510/- towards payment of estimate cost (Rs.500 towards registration fee and Rs. 61,91,010 towards estimate charges) for the provision of dedicated feeder line. The assessee had debited the same to the P&L account as revenue expenditure (schedule 24 other administrative expenses sl.No.32 power charges-others). The estimate charges are contingent in nature for the installation of new plant and machinery or extension for th....
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....the impugned order of the Ld.CIT(A) back to the file of the Ld.CIT(A) for de novo adjudication of the grounds of appeal raised by the assessee. 7. We have heard both the parties and perused the records, we first of all note that the Ld.CIT(A) has mistakenly cut & pasted his order for AY 2020-21 instead of AY 2014-15 and therefore, the impugned action of the Ld.CIT(A) is erroneous, since it pertains to some other year, which action of the Ld.CIT(A) can't be countenenced. Having said so, we also take note of the legal issue that has been raised by the assessee against the re-opening of assessment which led the AO passing of the re-assessment order dated 30.03.2022 u/s. 147/143(3) of the Act. Since the assessee has challenged the jurisdiction of the AO to have re-opened the assessment u/s. 147 of the Act, we are inclined to examine the validity of the legal issue. 8. Brief facts relating to the legal issue are that the assessee company is noted to have been incorporated in the year 1989 and is engaged in the business of manufacturing of TMT Steel Bars. The assessee company is noted to have filed its ITR/RoI for AY 2014-15 on 29.09.2014 which was selected for scrutiny and consequ....
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....ipt dated 20.07.2013 issued by the Electricity Board [which assessee had produced during the original assessment and found in the assessment folder of the assessee when the original assessment was framed on 18.12.2017]. Therefore, we find that there was no tangible material in the possession of the AO other than the material already filed by the assessee during the original assessment in 2017. Since, we find that the reasons for reopening as stated by the AO indicates that the AO didn't had any other material which was extraneous to that already on record or new material has been discovered or came to his possession which would indicate escapement of income and since four (4) years have passed and original assessment has been framed u/s. 143(3) of the Act, the first proviso to Section 147 bars the AO from reopening the assessment without making an allegation that the assessee failed to make fully and truly disclosure at the time of assessment. The reasons recorded by the AO as reproduced supra doesn't spell out such an allegation made by the AO for justifying the reopening. Therefore, we are of the view that the AO didn't had the jurisdiction to reopen the assessment which has alre....
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.... Laws (Amendment) Act, 1987, Parliament not only deleted the words ?reason to believe? but also inserted the word 'opinion' in Section 147 of the Act. However, on receipt of representations from the Companies against omission of the words 'reason to believe', Parliament reintroduced the said expression and deleted the word 'opinion' on the ground that it would vest arbitrary powers in the Assessing Officer. We quote hereinbelow the relevant portion of Circular No.549 dated 31st October, 1989, which reads as follows: "7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression `reason to believe' in Section 147. - - A number of representations were received against the omission of the words 'reason to believe-from Section 147 and their substitution by the `opinion- of the Assessing Officer. It was pointed out that the meaning of the expression, `reason to believe' had been explained in a number of court rulings in the past and was well settled and its omission from section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1....