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TMI Blog2014 (4) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... g grounds:- "1. Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that the reopening of assessment is not correct. 1.1 The learned CIT(A) has further erred in overlooking the fact that the disallowance u/s has been upheld by the Bombay High Court in the case of Godrej & Boyce. Therefore, the reopening of the assessment u/s 147 was on valid ground. 1.2 The learned CIT(A) has further overlooked the fact that the restriction for reopening of assessment pertains to assessment year beginning on or before April 2001 whereas the assessment year involved is 2005-06. 2. Brief facts, qua the issue raised on the validity of re-opening under section 148 of the Act, are that the assessee is eng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under section 14A, which was attributable to the earning of exempt income. Thereafter the Assessing Officer completed the assessment after treating the receipts shown in the Profit & Loss account as income from other sources and disallowed the entire expenditure claimed by the assessee. Since the entire expenses were disallowed, therefore, no further disallowance under section 14A was made by the Assessing Officer though he made separate disallowance of section 14A. 4. Before the learned Commissioner (Appeals), it was submitted that the only ground for re-opening of assessment is disallowance under section 14A, which could not have been done in view of the provisions of section 14A, inserted by the Finance Act, 2002, with retrospective e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year beginning on/or before 1st April 2001, and not in the assessment year thereafter i.e., after 1st April 2001. In the present case, the assessment year is A.Y. 2005-06 and, hence, the proviso will not be applicable to the facts of the present case. Even otherwise also, the Revenue's case is covered by the decision of the Hon'ble Supreme Court in Honda Siel Power Products Ltd. v/s DCIT, [2012] 20 Taxman.com 5 (SC), wherein the Hon'ble Supreme Court has upheld the decision of the Delhi High Court in Honda Siel Power Products Ltd. v/s CIT, [2012] 340 ITR 53 (Del.), wherein, even for the assessment year 2000-01, it was held that re-opening of assessment under section 147 for the purpose of disallowance for expenditure under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jet Airways, [2010] 195 Taxman.com 117 (Bom.) and Delhi High Court decision in Ranbaxy Laboratories Ltd. v/s CIT, [2011] 12 Taxman.com 74 (Del.). Lastly, he submitted that the assessee, after seeking the "reasons recorded" from the Assessing Officer had filed neither objections which have neither been dealt with nor being disposed off by the Assessing Officer. Therefore, the order of the Assessing Officer should be quashed on this ground also. 7. We have carefully considered the rival contentions and also perused the orders of the authorities below. On a perusal of the learned Commissioner (Appeals)'s order, it is seen that he has quashed the assessment order as invalid on the ground that proviso to section 14A prohibits re-opening of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the issue on a wrong legal footing, therefore, we are of the considered opinion that the entire issue of deciding the validity of re-opening and on merits, is required to be restored back to the file of the learned Commissioner (Appeals). Consequently, we set aside the impugned order passed by the learned Commissioner (Appeals) and restore the issue back to his file for not only to decide various other objections of the assessee on the validity of the proceedings under section 148, but also to deal and decide the issue on merits of the addition as was raised before him, against the assessment order. The learned Commissioner (Appeals) will also provide due and effective opportunity of hearing to the assessee. Thus, the ground raised by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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