TaxTMI 
TaxTMI 
2026 (2) TMI 814
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....61 (hereinafter referred to as 'the Act of 1961'), the appellant-Income Tax Department has assailed the common order dated 16.02.2024 for Assessment Years 2011-12 and 2012-13, passed by Income Tax Appellate Tribunal, 'E' Bench, New Delhi (hereinafter referred to as 'the Tribunal'), whereby the appeals filed by the respondent-National Thermal Power Corporation (hereinafter referred to as 'NTPC') were allowed. 2. The small issue involved in the matter, maybe having larger revenue involvement, is as to whether the Assessing Officer (AO) can initiate reassessment proceedings on the basis of an objection raised by the audit party of the Income Tax Department. 3. For the sake of convenience of disposal, the facts pertaining to AY 2012-13 in....
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....er Section 143(3) read with Section 147 of the Act of 1961 and raised a demand as proposed in the show cause notice. Against the said reassessment order of the AO, the respondent preferred an appeal before the CIT(A) who rejected the appeal filed by the NTPC vide order dated 18.04.2023, whereafter the assessee preferred an appeal before the Tribunal which came to be allowed vide the impugned order dated 16.02.2024. 9. While allowing the appeal filed by the NTPC, the Tribunal held that the initiation of reassessment proceedings under Section 147/148 of the Act of 1961 for Assessment Year 2012-13 is based on a mere change of opinion and the same was not permissible in view of the various judgments. 10. Mr. Shlok Chandra, learned Senior ....
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....nner and as many as 15-18 pages have been used discussing such issue and that even the audit party had seen said order of the AO, when the issue was examined. He argued that based on very same facts, the audit party has taken a different view which is nothing but a difference of opinion and the same cannot be a reason to initiate re-assessment proceedings. 14. Mr. Kantoor learned counsel for the respondent-assessee relied upon the following judgments in support of his submissions : i. Indian And Eastern Newspaper Society v. CIT reported in (1979) 119 ITR 996. ii. FIS Global Business Solutions India Pvt. Ltd. (formerly known as Efunds international India Pvt. Ltd.) v. Assistant Commissioner of Income Tax reported in (201....
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....a change of opinion. 18. As per the law in vogue at the relevant time, the provision expressly used the language 'reason to believe' and the same has been interpreted by Hon'ble the Supreme Court and this Court that 'reason to believe' must be of the AO himself and must be based on sound reasoning. The reason and satisfaction has to be that of the authority exercising jurisdiction and not borrowed. 19. So far as the judgments relied upon by Mr. Nishchay Kantoor are concerned, we find that the issue in hands has been dealt by Hon'ble the Supreme Court in its judgment rendered in the case of Indian and Eastern Newspaper Society vs. CIT reported in [1979] 119 ITR 996, wherein it has been held that the Assessing Officer while dealing with....
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....- "19. It is well settled that audit objection on the point of fact can be a valid ground for reopening of assessment. In the case of New Light Trading Co. v. CIT [2001] 117 Taxman 741/[2002] 256 ITR 391 (Delhi), a Division Bench of this court after referring to the decision of Supreme Court in CIT v. P.VS. Beedies (P.) Ltd. [1999] 237 ITR 13/103 Taxman 294, has held as under (at page 393): "In the case of P. V. S. Beedies Pvt. Ltd. [1999] 237 ITR 13, the apex court held that the audit party can point out a fact, which has been overlooked by the Income-tax Officer in the assessment. Though there cannot be any interpretation of law by the audit party, it is entitled to point out a factual error or omission in the assessment....