TaxTMI 
TaxTMI 
2024 (2) TMI 1600
X X X X Extracts X X X X
X X X X Extracts X X X X
....se of M/s. Consolidated Photo & Finvest Ltd. Vs. ACIT (2006) 151 Taxman 41 (Delhi) wherein it is held that action under section 147 was permissible even if the Assessing Officer gathered his reasons to believe from the very same record as had been the subject matter of completed assessment proceeding? 3. the appellant craves leave to add, amend and/ or vary the grounds of Appeal before or during the course of hearing" 2. The brief facts of the case are that the assessee company is engaged in the business of functioning as a principal financial institution for the promotion, financing and development of the Micro, Small and Medium Enterprises and coordinates the functions of institutions engaged in similar activities. Return of income declaring income of Rs. 1506, 09, 36,510/- under the normal provisions of the Act and Rs. 1912, 58, 92,986/- as book profit under the provisions of section 115JB of the Act vide dated: 29.09.2015. During the assessment proceedings itself, the assessee filed a revised return of income on 14.02.2017 declaring total income at Rs. 1505, 38, 12,270/- and Rs. 1912, 58, 92,986/- respectively. Original assessment order u/s. 143(3) of the Act was pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n u/s. 36(1)(viii) of the Act. After considering the same and the additions made thereunder, the Ld. AO in Para 38 of the original assessment order passed u/s. 143(3) dated 09.03.2017 mentioned that the total income of the assessee will undergo a change and hence re-worked the deduction u/s. 36(1)(vii) and 36(1)(viia)(c) of the Act after taking into consideration relevant disallowance/additions. The relevant portion is reproduced as under: "38. On account of the above disallowance/additions, the total income of the assessee will undergo a change and hence the deduction u/s. 36(1)(vii) as well as 36(1)(viia)(c) allowable to the assessee are re-worked and allowed accordingly." 3. Therefore, in view of the above, it is clear that the aforesaid issue was already dealt by the AO during the course of original assessment proceedings u/s 143(3) of the Act. There had been full and true disclosure of all material facts during the course of the assessment proceedings itself. Thus, reopening the said case on same facts is nothing but a mere change of opinion. It is now a well decided judicial pronouncement that no reopening is possible on the basis of change of opinion. Copie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....change of opinion cannot per se be a reason for reopening. In fact we would like to place reliance on following decision of tribunal which has rejected the department contention with regards to placing reliance on the decision of A.L.A Firm vs. CIT as under: *Latest decision of Hyderabad Tribunal announced on 17.10.2023 in the case of DCIT vs. M/s. DRS Logistics Private Limited (ITA 1718/Hyd/2018) (Copy attached) *M/s. Crescent Construction Co vs. ACIT - 22(3) (ITA No. 658/Mum/2014)." 8. We have thoroughly considered the submissions of both the sides' alongwith original assessment order passed u/s. 143(3) of the Act and found that issue under consideration for the purposes of section 148 was discussed and deliberated in length. Further, there was no concealment or escapement of information on the part of the assessee. The AO was well versed and have full access to the information relevant for assessment. Rather, he himself calculated the figure of deduction and certain changes were incorporated in the order. In view of the above, case of the revenue is not sustainable as there is no fault at the end of the assessee and the AO already applied his mind during the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Mumbai REASONS FOR REOPENING OF THE ASSESSMENT U/S.147 OF THE ACT In this case, the scrutiny assessment proceedings were completed u/s.143(3) of the Income Tax Act, 1961 on 09.03.2017, assessing the total income of the assessee at Rs.1602,49,00,370 under the normal provisions of the Act and book profit u/s.115JB at Rs.1916.66.37.499 as against the total income declared of Rs.1505,38,12,270 under the normal provisions of the Act and book profit at Rs.1912,58,92,986. 2. On a perusal of the assessment records, it is seen that the assessee company has claimed deduction u/s.36(1)(viii) amounting to Rs.80,00,00,000 and has also claimed deduction u/s.36(1)(viia)(c) of the Act at Rs.79,39,60,401 @ 5% of the total income limited to actual provision made in the return. In the assessment order, said deductions were allowed at Rs.80,00,00,000 and Rs.84,46,95,341 considering the enhancement of total income subject to certain disallowances/ additions made therein. 3. However, since the assessee is eligible for deduction u/s.36(1)(viii) and also the deduction u/s.36(1)(viia) of the Act, in the order of precedence, for calculating the deduction u/s.36(1)(viii), the deduction u/s.36(1)....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... & Taparia Chartered Accountants 12, Navjeevan Wadi, Dhobi Talao, Mumbai - 400002 Tel .: 022-4022 0301 - 06, Fax : 022-40220314 E-Mail : [email protected] To, The Deputy Commissioner of Income Tax, Circle - 3 (3) (1), 6th Floor, Aayakar Bhavan, M. K. Road, Mumbai - 400 020. फायलिन office of the DCIT - 3(3) (1) 1.3 MAR 2019 Dear Sir, * MÆ°á»ngph * Reg: M/s. Small Industries Development Bank of India (PAN: ABCS,3980 N) Sub: Objection for reopening of assessment u/s.147 of IT Act, 1961 for A.Y. 2015-16. With reference to above we would like to submit that our above clients are in receipt of reasons for reopening for A Y 2015-16. The reason recorded by your goodself for reopening the assessment was as under: "In this case, the scrutiny assessment proceedings were completed uls. 143(3) of the Income Tax Act,1961 on 09.03.2017, assessing the total income of the assessee at Rs. 1602,49,00,370 under normal provisions of the Act and book profit uls, 115JB at Rs. 1916,66,37,499 as against the total income declared of Rs. 1505,38,12,270/- under the normal provisions of the Act and book profit at Rs. 1912,58,92,986/ -. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... reason to believe that the assessee has been allowed excess deduction uls.36(1)(vili) to the tune of Rs.9,07,81,308 and therefore the income chargeable to said extent has escaped assessment within the meeting of Sec. 147 of the Income Tax Act, 1961 and vence, it is a fit case of initiation of proceedings under Sec.147 of the Income Tax Act, 1961, in order to frame proper assessment to bring to tax appropriate income attributable to the above, which has escaped assessment. Accordingly, I hereby reopen the assessment by issuing a notice u/s. 148 of the Income Tax Act, 1961 for the year under consideration i.e. AY 2015-16. 5. Necessary approval of the Addl. Commissioner of Income Tax, Range-3(3), Mumbai has been observed for initiation of proceedings uls. 147 of the Income tax Act, 1961 vide letter No. Addl. CIT- Range3(3)/ Reopening u/s. 147/ 2018-19 dated 22.01.2019. Notice u/s. 148 of the Income Tax Act, 1961 is issued accordingly" We strongly object to the reopening of the assessment u/s.147 of the Income Tax Act, 1961 for following reasons: At the onset, it is humbly submitted that the case of your above assessee was assessed u/s.143(3) of the Act and the assessed in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erely on the basis of surmises and whims of the Ld. AO on a well settled issue, which was being otherwise examined and worked out as per law in the past. No particular reasons or judgements have been mentioned for the same except for merely an alleged aspect of "precedence". The basis prescribed for working out the said respective deductions allowable to the assessee as per law. The reopening of the case without application of mind is not valid under the Act. With regard to the same, reliance is placed on the following judgment of: ACIT vs. Dhariya Construction Co.[2011] 197 Taxman 202 (SC) where the Hon'ble Supreme Court has held that before reopening of any assessment the AO has to apply his mind to the information, if any, collected and must form a belief thereon. In this regard, provisions of section 36(1)(vila) and section 36(1)(vill) of the Act are being reproduced hereunder: Other deductions. 36. (1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28. "36(1)(viia) in respect of any provision for bad and doubtful debts made by (a) a scheduled....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... deductions have to be worked out and leave nothing for imagination or making presumption as is being done in the present case. The order of precedence being suggested In the reasons recorded for the reopening is just a figment of imagination of the Ld. AO and nowhere is the same being suggested in the Act. Rather, the pecific instance when and how the respective deduction is to be computed are very clearly mentioned in the respective provisions and the same have to be followed. Thus, the said reasons recorded are Incorrect and based merely on personal assumption which is not enough for reopening of an assessment and framing addition merely on surmises. There is no judgement or case reference also that has been brought out for forming the said basis. It would be appreciated that from the reasons recorded by your goodself as provided to the assessee, there is no fresh tangible material available with you to form your said basis for reopening of the said assessment. It would be appreciated that review in the garb of reassessment is not permitted. CIT vs. Amitabh Bachchan (Bombay High Court) www.itatonline.org NYK Line (India) Ltd. v. Dy. CIT. (2012) 68 DTR 90 (Bom)(High Cour....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty, however the same has not been shared with the assessee, therefore you are requested to kindly provide such approval to the assessee, so that we can deal with the sald approval also. In view of the above facts and circumstances of the case and position of law, we humbly submit that the reassessment proceedings Initiated in the present case may kindly be dropped. Thanking you, Yours sincerely, For SHAH & TAPARIA Chartered Accountants NOTIFIED TRUE COPY UITA S. SHAH Enche Ak Above. Document 9 à¤à¤¾à¤°à¤¤ सरकार GOVERNMENT OF INDIA कारà¥à¤¯à¤¾à¤²à¤¯, आयकर उप आयà¥à¤•à¥à¤¤ ३(३)-१, मà¥à¤‚बई DY. COMMISSIONER OF INCOME-TAX 3(3)-1, MUMBAI 6" FLOOR, ROOM NO. 609, AAYAKAR BHAVAN, MAHARSHI KARVE ROAD, MUMBAI- 20. (022) 2208 2295 (Direct); E-mail: [email protected] सतà¥à¤¯à¤®à¥‡à¤µ जयते Ref.No.Dy.CIT-3(3)(1)/Obj/Reopen/SIDBI-15-16/2018-19 Date : 18.03.2019 W/No CAY/12.03.2019/14/00915 निगमित सà....
X X X X Extracts X X X X
X X X X Extracts X X X X
....allow in peace-meal with any specified exclusions being the deduction allowable under the said section itself and the deductions allowable under ch. VIA. vii). Order of precedence suggested in the reasons is just a figment of imagination of the AO and nowhere the same is suggested in the Act, rather, the specific instance when and how respective deduction is to be computed are very clearly mentioned in the respective provisions and the same have to be followed. Thus, said reasons recorded are incorrect and based merely on personal assumption which is not enough for reopening of an assessment and framing addition merely on surmises. 4. " Your above objections for reopening of your assessment for AY 2015-16 have been considered, however the same are not acceptable. Firstly, it is to state that the decisions relied upon by you are not identical to that of the assessee as in your case, the in the original proceedings, the assessment records show that the AO had never called for any details/ „explanation with regard to re-computing the deduction u/s.36(1)(viii) after considering deduction u/s.36(1)(viia) of the Act, therefore, you cannot presume that the belief formed by the....