2012 (8) TMI 520 - AT - Income Tax

Reassessment order u/s 147 - the assessee has purchased a new software and it does not come under up gradation or for renewal of the existing software - Held that - CIT (A) has simply affirmed the reassessment order without deciding the issue in its right perspective by only saying that objection of the assessee was raised before the AO only by letter dated 27.12.2010 which is not valid in law and has not considered the issue properly - CIT (A) ignored to note assessee s contention that the original assessment was completed under section 143(3) by considering the same material - remit the matter back to the CIT (A) to decide the matter afresh - in favour of assessee for statistical purposes.

Summary

Issues:
Validity of reassessment order under section 148.

Analysis:
The appeal was against the order of CIT(A)-I, Coimbatore for the assessment year 2005-06. The Assessing Officer observed software expenses debited by the assessee and disallowed it as capital expenditure. The assessee contended that the reopening of the case was beyond four years and amounted to a change of opinion. CIT(A) confirmed the addition made by the Assessing Officer. The assessee appealed before the Tribunal, arguing that the reopening was invalid. The Tribunal found that CIT(A) did not properly consider the issue and remitted the matter back to CIT(A) for a fresh decision after considering the case laws relied upon by the assessee.

The main issue before the Tribunal was the validity of the reassessment order under section 148. The CIT(A) had not properly considered the objection raised by the assessee regarding the validity of the reassessment. The Tribunal found that the CIT(A) did not address the issue in its right perspective and remitted the matter back to CIT(A) for a fresh decision. The Tribunal emphasized that the objection raised by the assessee regarding the reassessment needed to be considered in light of the relevant case laws cited.

The assessee had argued that the reopening of the case was beyond the permissible four-year period and amounted to a change of opinion. The Tribunal noted that the CIT(A) did not adequately address this argument and remitted the matter back for a fresh decision. The Tribunal directed CIT(A) to consider the case laws cited by the assessee and provide a reasonable opportunity for the assessee to present their case. The appeal was allowed for statistical purposes, and the matter was remitted back to CIT(A) for a fresh decision.

In conclusion, the Tribunal found that the CIT(A) had not properly considered the objection raised by the assessee regarding the validity of the reassessment under section 148. The Tribunal set aside the CIT(A)'s order and remitted the matter back for a fresh decision, emphasizing the need to consider the relevant case laws and provide a reasonable opportunity for the assessee to present their case.