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TMI Blog2014 (7) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... sclose the material facts truly and correctly - no error has been committed by the CIT(A) and ITAT in holding that the reassessment proceedings were bad in law – thus, there was no reason to interfere in the order of the Tribunal and no substantial question of law arises for consideration – Decided against revenue. - Tax Appeal No. 432 of 2014 - - - Dated:- 10-6-2014 - M. R. Shah And K. J. Thaker,JJ. For the Appellant : Mr. Sudhir M. Mehta, Advocate ORDER (Per : Honourable Mr. Justice M. R. Shah) 1. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Income Tax Appellate Tribunal (hereinafter referred to as the Tribunal ), Dated : 16.09.2013, passed in ITA No. 742/Ahd/2013 for the Assessment Year 2005-2006, the Revenue has preferred the present Tax Appeal with the following proposed substantial questions of law; [A] Whether on the facts and circumstances of the case and in law, the Hon ble ITAT was justified in holding that there was no allegation that there was failure on the part of the assessee to disclose material facts fully and truly all material facts and totally ignoring that in this case Explanation 1 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration amounting to Rs.57.06/- lacs on secured and unsecured loans obtained. On the other hand the assessee extended loan and advances and made investment to the tune of Rs.93.52 lacs mentioned in schedule 10 and 7 appended to the balance sheet as under:- Schedule-7 Investment Rs. In Lac Corporation Bank RD 3.63 Fixed Deposit 0.97 Fixed Deposit 8.77 Fixed Deposit 5.12 ICICI Safety Bond 0.20 ICICI Safety Bond 0.30 Shares-Kothari Info Tech. Ltd. 53.36 Shares-Cham Chemichals and Tech Ltd. 0.08 72.43 Schedule 10- Loan/Adv./Deposit Rs. In Lac Bhagara Ployfab p Ltd 5.00 Bilkishbanu Mosaji Multani 1.00 HP Mahida 0.40 Harsh Synthetics ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serving that all the conditions which are required to be fulfilled while carrying out re-assessment under Section 147 of the Act were not complied with. The learned CIT(A) also observed that the initiation of the re-assessment proceedings were after four years. The learned CIT(A) observed as under in Paras-2 and 3; 2.3 I have considered the facts of the case, basis of reopening and submissions of appellant. As it may be seen from the reasons recorded by AO, the basis of reopening the assessment was that he was not able to make addition of interest amount on account of loans and rental income due to non deduction of tax during original assessment proceedings. Therefore, he undertook the remedial action by issuing notice u/s.148 of the I.T. Act. However, the action of AO of reopening of assessment on the basis of above grounds is not justifiable. To start proceedings u/s. 147 of I.T. Act, AO must have reason to believe and this belief should be based on reasons which are relevant and material. The change of opinion or forming an opinion on any issue cannot be termed as reason to form belief for reopening the assessment. In this case, AO has no new material to form the opinion t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by establishing with the evidence that the assessee has not made true and full disclosure of material facts necessary for his assessment. Contrary to this, in the reasons recorded for reopening the assessment, AO himself has stated in para 2 that the perusal of assessment records revealed that interest and rental expenses have escaped assessment. It means all the true and full material facts were already available in the assessment records of appellant. Thus, the AO has also failed to prove that the assessee has not made true and full disclosure for the purpose of reopening the assessment proceedings. In view of the facts and legal position as discussed above, reopening of assessment cannot be held legal, therefore, the whole reassessment proceedings stand annulled. 6. Feeling aggrieved and dissatisfied with the order passed by the CIT(A) in allowing the appeal and in setting aside the reassessment order, the Revenue preferred the appeal before the learned ITAT. The learned Tribunal dismissed the appeal and confirmed the order passed by CIT(A) by observing as under at Paras-3 and 4; 3. We have considered the rival submissions. We find that the assessment was annulled by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Tribunal, the Revenue has preferred the present Tax Appeal for consideration of the aforesaid proposed questions of law. 8. Mr. Sudhir Mehta, learned Advocate appearing on behalf of the appellant, has vehemently submitted that the learned Tribunal has materially erred in holding that the reassessment was initiated beyound the period of four years. It is, further, submitted that the learned Tribunal has materially erred in holding that all the conditions of reassessment, as per Section 147 of the Act, are not fulfilled. It is, therefore, submitted that the learned Tribunal has materially erred in holding that the reassessment proceedings were bad. No other submission has been made. 9. We have heard Mr. Sudhir Mehta, learned Advocate appearing on behalf of the appellant- Revenue and have gone through the orders passed by the learned CIT(A) and the learned ITAT. We have also gone through the reasons recorded by the AO for reopening the assessment under Section 148 of the Act, which are reproduced herein above. Considering the above, it is required to be noted that, as such, in the reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X
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