2018 (9) TMI 2070 - AT - Income Tax

Reopening of assessment u/s 147 - Disallowance of agricultural income - addition as income from other sources - HELD THAT - In case the assessment is reopened on an issue and no addition is made on that ground and the addition is made on other issues which did not find mention in the reasons recorded for reopening the assessment, then such order of re-assessment cannot be upheld. Applying the said principle of JET AIRWAYS (I) LTD. 2010 (4) TMI 431 - HIGH COURT OF BOMBAY to the facts of the present case being the decision of jurisdictional High Court, there is no merit in re-assessment order passed under section 148 of the Act. Jurisdiction of the JCIT i.e. online approval mentions to be JCIT, Range-I, Aurangabad - Online recording of reasons and online approval of JCIT in the absence of specific provisions under the Act provided for the same, cannot be upheld since in the relevant assessment years, no such amendment was made to the Income-tax Act. Without going into allegation of recording of reasons on a date before the date of approval by the JCIT or after issuing notice, are not being individually addressed as it is case of Revenue that proceedings for re-assessment were initiated on the basis of online application, online seeking of approval by the Assessing Officer from JCIT and the said approval being granted by JCIT online. In the absence of any provisions in the Act at the relevant point of time, find no merit in the re-assessment proceedings initiated against assessee - Decided in favour of assessee.

Summary

Issues Involved:
Validity of assessment framed under section 143(3) r.w.s. 147 of the Income-tax Act, 1961.

Detailed Analysis:
The judgment pertains to a bunch of four appeals by the same assessee against separate orders of CIT(A)-1, Aurangabad, dated 01.12.2015, for assessment years 2005-06 to 2008-09 under section 143(3) r.w.s. 147 of the Income-tax Act, 1961. The appeals were heard together and disposed of by a consolidated order. The assessee challenged the re-assessment order passed by the Assessing Officer and confirmed by CIT(A), focusing on the assessment year 2005-06 to adjudicate the issue.

The primary issue raised by the assessee was the validity of the assessment framed under section 143(3) r.w.s. 147 of the Act. The Authorized Representative for the assessee argued that the additions made were beyond the reasons recorded for reopening the assessment, citing a decision by the Hon'ble Bombay High Court. The Departmental Representative contended that online recording of reasons and approval by JCIT validated the reopening. The Authorized Representative highlighted discrepancies in the online approval process and the lack of statutory provisions for such procedures, seeking the quashing of re-assessment proceedings. The issue of jurisdictional validity was extensively debated, with the Authorized Representative challenging the online approval process and discrepancies in notice issuance dates.

After considering submissions, the Tribunal found that the Assessing Officer had recorded reasons for reopening the assessment based on an investment issue, but no additions were made on that ground. Referring to the decision of the Hon'ble Bombay High Court, the Tribunal held that if additions were made on issues not mentioned in the reasons for reopening, the re-assessment order could not be upheld. The Tribunal concluded that the re-assessment proceedings were invalid due to jurisdictional issues, including online recording of reasons without statutory backing. Consequently, the re-assessment order was deemed invalid, and the additional ground of appeal raised by the assessee was allowed. The Tribunal also noted that the facts and issues in other appeals were identical to the main appeal, applying the same decision to those cases.

In conclusion, all the appeals of the assessee were allowed, and the order was pronounced on September 24, 2018.