2018 (10) TMI 1446 - AT - Income Tax

Reopening of assessment - validity of reasons to believe - no return of income was filed - allotment of new pan - Held that - It is only subsequent to the filing of the return of income, the new PAN was allotted. Pursuant to the notice issued u/s 148, assessee made attempts to e-file its return of income for the assessment year 2006-2007, which was unsuccessful. The relevant screen-shot is attached as annexure A1 to the paper book. The assessee cannot be faulted that it had quoted the PAN AAJFS9814M, which was duly allotted by the Department and valid as on the date of filing of return of income (i.e. 29.11.2006). The returns of income were filed for assessment year 2006-2007 and earlier assessment years quoting the PAN AAJFS9814M. For the earlier assessment years, returns of income were duly accepted and the assessments were completed. It is not the case of AO that the return for the assessment year 2006-2007 was not filed at all. The assessee has duly paid the advance tax and also claimed TDS and self-assessment tax. The scrutiny notice u/s 143(2) was duly issued to the assessee quoting the old PAN. However, the scrutiny assessment got time barred and notice u/s 148 was issued for the sole reason that no return of income was filed for the assessment year 2006-2007. This reason stated for reopening the assessment is on wrong assumption of jurisdiction and not based on relevant material. CIT(A) was justified in cancelling the reassessment order passed u/s 144 r.w.s. 147. Consequently, the additions made in the reassessment does not survive and has been rightly deleted by the CIT(A). - Decided in favour of assessee.

Summary

Issues:
1. Justification of quashing the reassessment order dated 01.03.2013 by the CIT(A).

Detailed Analysis:

Revenue's Appeal:
The Revenue raised the issue of whether the CIT(A) was justified in quashing the reassessment order dated 01.03.2013. The case involved the assessment year 2006-2007 and the assessee, a software development and sales company, had initially filed its return with one PAN which was later changed by the Department. The Assessing Officer issued a notice for reassessment under section 148 of the I.T. Act, claiming that no return was filed by the assessee for the concerned year. The CIT(A) quashed the reassessment order, stating that the reason for reopening the assessment was invalid as the assessee had indeed filed its return with the original PAN. The CIT(A) observed that the new PAN was allotted after the original return was filed, and therefore, the reassessment proceedings were unjustified. The additions made by the Assessing Officer were subsequently deleted by the CIT(A).

Assessee's Cross Objection:
The assessee's cross objection raised grounds regarding the merits of the addition. However, since the reassessment order was quashed by the CIT(A), the addition on merits was deemed irrelevant and did not survive. Consequently, the cross objection was dismissed as infructuous.

In conclusion, the Tribunal dismissed the appeal filed by the Revenue and the cross objection by the assessee. The reassessment order was quashed by the CIT(A) based on the invalid reason for reopening the assessment, leading to the deletion of the additions made by the Assessing Officer. The Tribunal upheld the CIT(A)'s decision, resulting in the dismissal of both the appeal and the cross objection.