2011 (6) TMI 762 - AT - Income Tax

Summary

Issues Involved:
The judgment involves appeals filed by the Revenue against orders of CIT(A), Jalandhar, under section 250(6) of the Income-tax Act, 1961 for assessment years 2001-02 & 2002-03. The common issue raised is the cancellation of assessment order by CIT(A) due to the AO wrongly assuming jurisdiction under section 147 of the Act.

Issue 1: Jurisdiction under Section 147
The Revenue contended that the CIT(A) erred in canceling the assessment order, arguing that the AO was justified in initiating proceedings u/s 147 of the Act. However, the CIT(A) quashed the reassessment proceedings, citing that the AO did not show failure on the part of the assessee to disclose material facts in the original assessment. The CIT(A) emphasized that a mere change of opinion on the same facts does not grant jurisdiction under section 147. The appellate order was based on proper appreciation of legal and factual aspects, leading to the dismissal of the revenue's appeals.

Issue 2: Deduction under Section 80IB
The assessment initially disallowed deduction u/s 80IB to the assessee, but the CIT(A) later allowed the deduction. The Revenue challenged this decision, particularly regarding the profit of the Branch Office at Rajkot. The CIT(A) held that the AO's reasons for reassessment were a mere change of opinion without new information, thus lacking jurisdiction under section 147. The appellate order was deemed well-reasoned and supported by credible material, resulting in the dismissal of the revenue's appeals.

Decision:
The ITAT Amritsar upheld the CIT(A)'s decision to cancel the assessment order, emphasizing the importance of full and true disclosure by the assessee and the limitations on the AO's jurisdiction under section 147. The appeals filed by the Revenue were dismissed based on the proper evaluation of legal and factual aspects in the case.