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2016 (3) TMI 18 - AT - Income TaxReopening of assessment - benefits U/s 10AA be disallowed - CIT(A)quashed the reopening orders - Held that - It is undisputed fact that the ld Assessing Officer in first scrutiny assessment U/s 143(3) dated 10/12/2009 has considered all the purchases and sales of non-SEZ unit, SEZ unit and the fact of the Surat SEZ unit were also submitted by the assessee and considered by the Assessing Officer in his assessment. Thereafter on same facts and circumstances, he reopened the case U/s 147 even he did not have any tangible material with him on which he can form opinion on it. When in first scrutiny assessment, all the particulars of income had been disclosed by the assessee and all material fully and truly has been disclosed for the assessment. The Assessing Officer cannot review its own order on the basis of the same material and information. It is only change of opinion, which is not permitted under the law. The Hon ble Supreme Court s decision in the case of CIT Vs. Kelvinator India Ltd. (2010 (1) TMI 11 - SUPREME COURT OF INDIA ) is squarely applicable. The ld DR had not controverted the finding given by the ld CIT(A) and the submissions made by the assessee before the lower authorities. Therefore, we uphold the order of the ld CIT(A). When the matter has been decided by this Bench on technical ground, we have not decided the revenue s appeal on merit. - Decided against revenue
Issues Involved:
1. Validity of reopening proceedings under Section 147/148 of the Income Tax Act. 2. Eligibility of the assessee for claim of deduction under Section 10AA of the Act. 3. Consideration of change of opinion in reopening assessment. Analysis: Issue 1: Validity of Reopening Proceedings The Assessing Officer initiated proceedings under Section 147/148 based on the claim of exemption under Section 10AA made by the assessee. The ld CIT(A) quashed the reopening, citing the absence of tangible material for the Assessing Officer to form a new opinion. The ld CIT(A) referred to various High Court decisions, including the Hon'ble Gujarat High Court and Bombay High Court, emphasizing that reopening without tangible material and based on a change of opinion is not permissible. The Supreme Court's decision in CIT Vs. Kelvinator of India Ltd. was also cited to support the contention that a mere change of opinion is not a valid ground for reopening an assessment. Issue 2: Eligibility for Deduction under Section 10AA The Assessing Officer disallowed the assessee's claim of deduction under Section 10AA, stating that the assessee's trading activity did not qualify for the exemption. The ld CIT(A) upheld the claim of exemption made by the assessee under Section 10AA during the initial assessment under Section 143(3) of the Act. The ld CIT(A) found that the Assessing Officer had considered all relevant details during the initial assessment and that the subsequent proceedings under Section 147 were unjustified. Issue 3: Consideration of Change of Opinion The ld CIT(A) reiterated that the Assessing Officer's decision to reopen the assessment based on a change of opinion was not supported by tangible material. The ld CIT(A) highlighted the principle that reassessment cannot be solely based on a change of opinion without new material. The argument presented by the assessee, supported by legal precedents, emphasized that the Assessing Officer's actions were invalid as they amounted to a review of the original assessment without any fresh grounds. In conclusion, the Appellate Tribunal dismissed the revenue's appeal and allowed the assessee's cross objection. The Tribunal upheld the ld CIT(A)'s decision to quash the reopening proceedings, emphasizing the importance of tangible material and the prohibition against reassessment based solely on a change of opinion. The judgment reaffirmed the significance of thorough consideration during the initial assessment and the limitations on reassessment without new material.
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