2023 (9) TMI 982 - AT - Income Tax

Reopening of assessment u/s 147 - deduction towards the provision for customer disallowances and disallowance u/s. 35(2AB) - HELD THAT - As both the alleged issues relating to escaping assessment as raised in the reopening proceeding initiated u/s. 148 of the Act, were duly verified by the assessing officer while completing the assessment u/s. 143(3) of the Act and no new material came to the knowledge of the Assessing Officer subsequent to the original assessment proceeding is reflecting in recording reasons or in the notice u/s. 142(1) of the Act by the Ld.AO. Thus the facts which was available during the regular assessment and duly verified and examined by the Ld.AO, reopening on the same set of facts is nothing but a clear case of change of opinion as submitted by the Ld.AR appears to be acceptable. We find that in the case in hand, the allegation of the assessing officer to disclose fully or truly of material facts for assessment for the year under consideration or the income chargeable to tax has escaped assessment for the year under consideration has no legs to stand upon. Moreso, once the issue has already been dealt with during the original assessment proceeding and only upon due application of mind and upon examination of the same, the Ld.AO passes an order in the original assessment, the Assessing Officer cannot exercise the power to review or reassess the same. - Decided in favour of assessee.

Summary

Issues involved:
The appeal challenges the order confirming additions made in reassessment proceedings under section 148 of the Income Tax Act for the assessment year 2009-10.

Maintainability of the reassessment proceedings:
The advocate for the assessee argued that the reassessment proceedings were not maintainable as the Assessing Officer proceeded without disposing of the objections raised by the appellant. It was contended that reopening the assessment on the same facts amounted to a change of opinion, which is impermissible under the law. Citing various judgments, including CIT v. Kelvinator of India Ltd, the advocate sought to quash the reassessment proceedings.

Verification of issues during original assessment:
The appellant had filed the original return of income, which was subsequently revised. The assessment proceedings included scrutiny of issues such as enhanced depreciation and disallowance under section 14A of the Act. During appellate proceedings, some disallowances were upheld while others were allowed. The notice for reopening the assessment was challenged on the grounds that the issues had already been examined during the original assessment and no new material was presented. Relying on the judgment in CIT v. Kelvinator of India Ltd, the Tribunal found the reassessment proceedings to be void-ab-initio and quashed the entire process.

Judgment Summary:
The Appellate Tribunal, in the case challenging the additions made in reassessment proceedings for the assessment year 2009-10, addressed the maintainability of the reassessment proceedings and the verification of issues during the original assessment. The Tribunal considered the arguments presented by the advocate for the assessee regarding the lack of disposal of objections and the impermissibility of reopening assessments on the same facts. Relying on legal precedents, including the judgment in CIT v. Kelvinator of India Ltd, the Tribunal found the reassessment proceedings to be void-ab-initio and quashed the entire process, allowing the appeal filed by the assessee.