9911796707
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Issues Involved:
1. Delay in filing the appeal. 2. Reopening of assessment under Section 147 of the IT Act for the assessment years 1998-99 and 1999-2000. Detailed Analysis: 1. Delay in Filing the Appeal: The assessee filed the appeal for the assessment year 1998-99 after a delay of 22 days. The delay was attributed to heavy workload due to time-barring assessments. An affidavit from the taxation manager of the assessee company was submitted, explaining the inadvertent oversight. The tribunal found merit in the plea and condoned the delay, taking the appeal on record. 2. Reopening of Assessment under Section 147 of the IT Act: Assessment Year 1998-99: - Original Assessment: The return of income was filed on 30th Nov 1998, and the original assessment was completed on 23rd March 2001 under Section 143(3). - Reason for Reopening: The AO noticed discrepancies regarding depreciation and deduction under Section 80HHC. Specifically, depreciation was incorrectly allowed on provisions made and not on actual utilization, and there was a miscalculation in the deduction under Section 80HHC. - Assessee's Contention: The assessee argued that all material facts were disclosed during the original assessment, and no new facts had emerged. The reopening was claimed to be a mere change of opinion. - Tribunal's Decision: The tribunal noted that the original assessment involved detailed discussions on depreciation and deductions under Section 80HHC. The reasons for reopening were based on the same material, indicating a change of opinion. Citing various judgments, including those of the Hon'ble Supreme Court and Bombay High Court, the tribunal held that reopening on a mere change of opinion is not permissible, especially beyond four years from the end of the relevant assessment year. Consequently, the notice under Section 148 and the subsequent assessment were quashed. Assessment Year 1999-2000: - Original Assessment: Similar to the previous year, the original assessment involved detailed discussions on deductions under Sections 80-IA, 80-IB, and 80HHC. - Reason for Reopening: Discrepancies were noted in miscellaneous receipts and deductions under Sections 80-IA and 80HHC. However, the reasons recorded were not found in the assessment records. - Assessee's Contention: The assessee argued that the reopening was based on the same material facts already disclosed during the original assessment, amounting to a change of opinion. - Tribunal's Decision: The tribunal found no recorded reasons for reopening in the assessment records. Even if reasons were recorded, the reopening was based on a change of opinion. Citing relevant case law, the tribunal held that reopening within four years must be based on new material facts, not a change of opinion. Therefore, the reassessment proceedings and the subsequent assessment were quashed. Conclusion: Both appeals filed by the assessee were partly allowed. The tribunal quashed the reassessment proceedings for both assessment years 1998-99 and 1999-2000, holding that the reopening was based on a mere change of opinion, which is not permissible under the law. The other grounds of appeal on merits were not addressed due to the decision to quash the reassessment proceedings.
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