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2018 (6) TMI 292 - AT - Income TaxReopening of assessment u/s 147 - validity of reasons to believe - reopening was made on going through the assessment record - ACIT issued directions to the AO u/s 144A of the Act on 12.11.2010, directing him to examine the issue of loss on sale of land - Held that - As in the case of Motilal R.Todi vs ACIT 2015 (11) TMI 181 - ITAT MUMBAI when a specific direction has been given by the Additional Commissioner u/s 144A of the Act for passing an order u/s 143(3) of the Act on a specific issue, assessment cannot be reopened on the same issue - AO has no power of review - he cannot on the basis of the same material available in the assessment record come to different conclusion - thus reopening is bad in law for the reasons that there is no tangible material which has come to the possession of the AO, subsequent to passing of an order u/s 143(3) - reopening of assessment cannot be done to correct each and every mistake if any committed in the assessment order - hence decided in favor of assessee.
Issues Involved:
1. Reopening of assessment. 2. Merits of the addition. 3. Levy of interest under section 234B of the Act. 4. General grounds. Issue-wise Detailed Analysis: 1. Reopening of Assessment: The primary issue revolves around the reopening of the assessment under section 143(3) read with section 147 of the Income Tax Act, 1961. The assessee argued that the reopening was bad in law as no new tangible material had come into the possession of the Assessing Officer (AO). The reopening was based solely on the assessment records, which indicated a different conclusion than the original assessment. The Tribunal cited the case of Motilal R. Todi vs. ACIT, emphasizing that reopening requires fresh tangible material. The Tribunal held that the AO does not have the power of review and cannot come to a different conclusion based on the same material available in the assessment record. Additionally, the Tribunal noted that the Additional Commissioner had previously directed the AO to examine the issue of loss on sale of land, which the AO had done during the original assessment. Therefore, the reopening was deemed invalid and bad in law. 2. Merits of the Addition: Since the reopening of the assessment was quashed on jurisdictional grounds, the Tribunal did not adjudicate the merits of the addition. The Tribunal stated that addressing the merits would be academic in nature given the invalidity of the reopening. 3. Levy of Interest under Section 234B of the Act: The Tribunal did not specifically address the issue of the levy of interest under section 234B, as the primary focus was on the jurisdictional validity of the reopening of the assessment. 4. General Grounds: The Tribunal noted that the remaining grounds were consequential and general in nature. As the primary issue of reopening was resolved in favor of the assessee, these grounds were disposed of accordingly. Conclusion: The appeal by the assessee was allowed, and the reassessment order was quashed on jurisdictional grounds. The Tribunal concluded that the AO had no new tangible material to justify the reopening and that the reopening was an impermissible review of the original assessment. The Tribunal emphasized the legal principle that reopening requires fresh tangible material and cannot be based on a mere reappraisal of existing records. The order pronounced in the court on 01.06.2018 allowed the appeal of the assessee.
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