2012 (4) TMI 805 - AT - Income Tax

Summary

Issues involved: Reopening of assessment u/s 148 of the Income Tax Act and disallowance u/s 43B of the Act.

Reopening of assessment: The appeal was filed by the Revenue against the order of the ld.CIT(A) challenging the reopening of assessment. The original assessment was completed u/s 143(3) of the Act, showing a loss claimed by the assessee. Subsequently, the assessment was reopened by issuing a notice u/s 148 of the Act. The ld.CIT(A) held that the reopening of assessment was not proper as no new information was available with the Assessing Officer that led to the opinion for escapement of income for re-assessment purposes. The ld.CIT(A) relied on legal precedents to support this decision, emphasizing that when primary facts necessary for assessment are fully disclosed, the Income Tax Officer cannot commence proceedings for re-assessment based on a change of opinion. The Revenue failed to point out any new information or material that was not available during the original assessment, leading to the confirmation of the ld.CIT(A)'s finding and the dismissal of the Revenue's appeal.

Disallowance u/s 43B of the Act: Another ground of appeal by the Revenue was against the deletion of a disallowance made u/s 43B of the Act. The ld.CIT(A) had deleted this disallowance, stating that the interest in question was payable to an institution not covered by the provisions of section 43B of the Act. The Revenue could not provide any material to demonstrate that the interest was payable to an institution covered by section 43B. Since the reopening of assessment was deemed improper, the ground of appeal related to the disallowance u/s 43B was also dismissed.

In conclusion, the appeal of the Revenue was dismissed by the Appellate Tribunal ITAT CHENNAI, upholding the decision of the ld.CIT(A) regarding the reopening of assessment and the disallowance u/s 43B of the Act.