2017 (9) TMI 461 - AT - Income Tax

Reopening of assessment - overdue interest and audit fees - proof of adequate inquiry - no opinion v/s change of opinion - Held that - No opinion had been formed in the original assessment order regarding these two issues. Hence there is no change of opinion involved in the subsequent reopening of assessment. Thus the peal of the appellant that there was full application of mind by the AO on these issued in the original assessment proceedings is not at all borne out by the record and is therefore not acceptable. Thus there is no reason to interfere in the reopening of the case We find that the Ld. CIT(A) has given finding on fact that assessee has not written off such NPA and interest thereon as bad debt during the year under consideration this finding on fact is not controverted by the Ld. Counsel for the assessee. Ld. Counsel submitted that this is allowable u/s 37 of the Act. In our view the contentions of the assessee is misplaced the Section 37 relates to the any expenditure not being expenditure of the nature described in Section 30 to 36 since the interest is part of that would be covered u/s 36(1)(vii) of the Act. Further the plea of the assessee is that this has been allowed in the earlier years in our view rule of consistency would apply where the assessee has been following the particular accounting policy and the revenue has been accepted the same but the issue of allowability or disallowability of expenses would certainly depend upon the provision of the Act. Therefore this ground of assessee s appeal is dismissed. - Appeal of assessee dismissed.

Summary

Issues:
1. Reopening of assessment under section 147 r/w 148.
2. Disallowance of provision of overdue interest.
3. Charging of interest u/s 234B of the Act.
4. General grounds of appeal.

Issue 1: Reopening of assessment under section 147 r/w 148:
The case involved cross-appeals by the Assessee and the Revenue against the order of the Ld. CIT (A)-5, Jaipur, regarding the assessment for A.Y. 2011-12. The Assessee challenged the reopening of the assessment, arguing that it was bad in law without jurisdiction. The Ld. CIT(A) confirmed the action of the Assessing Officer in reopening the assessment. The Tribunal upheld the Ld. CIT(A)'s decision, stating that the Assessing Officer did not raise any specific query during the original assessment regarding the issues in question, hence there was no change of opinion. The Tribunal affirmed the Ld. CIT(A)'s order, rejecting the Assessee's appeal on this ground.

Issue 2: Disallowance of provision of overdue interest:
The Assessee contested the disallowance of provision of overdue interest by the Assessing Officer. The Tribunal noted that the Assessee had not demonstrated why the rule of consistency was not followed. The Ld. CIT(A) allowed the disallowance, stating that the interest is covered under section 36(1)(vii) of the Act, not section 37 as claimed by the Assessee. The Tribunal dismissed the Assessee's appeal on this ground, upholding the Ld. CIT(A)'s decision.

Issue 3: Charging of interest u/s 234B of the Act:
The Assessee disputed the charging of interest u/s 234B of the Act. The Tribunal deemed this issue as consequential and did not provide a separate adjudication.

Issue 4: General grounds of appeal:
The Assessee raised general grounds of appeal, which the Tribunal deemed as not requiring separate adjudication.

In conclusion, both the Assessee's appeal in ITA No. 285/JP/2017 and the Revenue's appeal in ITA No. 240/JP/2017 were dismissed by the Appellate Tribunal ITAT Jaipur. The Tribunal upheld the Ld. CIT(A)'s decisions on various issues, including the reopening of assessment, disallowance of overdue interest, and deduction under section 80P(2)(a)(i) of the Income Tax Act. The judgments were delivered on August 29, 2017.