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2020 (10) TMI 1143 - AT - Income TaxReopening of assessment - Disallowance u/s. 14A - HELD THAT - We find that the reasons as recorded by Assessing Officer for reopening of assessment for the A.Y. 2012-13 was also identical for both these Assessment Years in which there was no mention about escapement of income on account of disallowance u/s. 14A of the Act. Facts being identical applying the ratio of the decision of the Hon'ble Jurisdictional High Court in the case of Jet Airways Ltd. 2010 (4) TMI 431 - BOMBAY HIGH COURT we hold that the reopening of assessments for both these assessment is bad in law. Thus, Ground No.1 is allowed.
Issues:
Reopening of assessment u/s 147 for A.Y. 2010-11 and A.Y. 2013-14, Disallowance u/s 14A r.w. Rule 8D, Escapement of income, Applicability of the decision in the case of Jet Airways Ltd. Analysis: The assessee filed appeals against the orders of the Learned Commissioner of Income Tax (Appeals) for A.Y. 2010-11 and A.Y. 2013-14. The primary contention was the reopening of assessments under section 147. The assessee argued that the assessment was reopened based on reasons not connected to the issue for which the assessment was reopened. The Assessing Officer did not mention disallowance u/s 14A in the reasons for reopening. The Tribunal noted that the reasons for reopening did not include any mention of disallowance u/s 14A. The Tribunal referred to a previous case where it was held that disallowance cannot be made on a fresh issue not mentioned in the reasons for reopening. The Tribunal concluded that the reopening of assessments was bad in law due to the absence of any mention of disallowance u/s 14A in the reasons for reopening. In a related case, the Tribunal upheld the decision that no disallowance u/s 14A is permissible when the issue for reopening was not the subject of any disallowance in the reassessment order. The Tribunal noted that the Revenue did not appeal against this decision. Therefore, the Tribunal set aside the order of the Commissioner and deleted the disallowance u/s 14A. The Tribunal applied the decision in the case of Jet Airways Ltd. to support its conclusion. The Tribunal found that the reasons for reopening assessments for A.Y. 2010-11 and A.Y. 2013-14 were identical to the reasons for A.Y. 2012-13, where disallowance u/s 14A was not mentioned. Following the precedent set in the case of Jet Airways Ltd., the Tribunal held that the reopening of assessments for both years was bad in law. Consequently, the Tribunal allowed Ground No.1 of the appeals, ruling that the reopening of assessments was not valid in law. As a result, the other grounds raised by the assessee were not addressed, and the appeals were partly allowed. The delay in pronouncing the judgment was attributed to the COVID-19 lockdown, following Rule 34(5) of the Income Tax Appellate Tribunal Rules, 1963, and the orders of the Hon'ble Bombay High Court. The Tribunal pronounced the order on 30.09.2020 in accordance with Rule 34(4) of ITAT Rules. By: Shri C.N. Prasad, Hon'ble Judicial Member and Shri M. Balaganesh, Hon'ble Accountant Member.
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