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TMI Blog2015 (6) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... , JJ. For the Appellant : Shri Vijay C. Kothari For the Respondent : Dr. P. Daniel ORDER PER VIJAYPAL RAO, JUDICIAL MEMBER The present appeal by the assessee is directed against the impugned order dated 28th February 2013, passed by the Commissioner (Appeals) 40, Mumbai, for the assessment year 2005 06. The grounds raised by the assessee are as under: 1. The learned CIT(A) has erred in passing the order without giving proper opportunity to the appellant. 2. The learned CIT(A) has erred in confirming the re opening of assessment u/s 147 fo the Act. 3. The learned CIT(A) has erred in confirming the addition of ` 35,25,000 being claim of write off of loans and advances due to non recovery of amounts. 4. The learned CIT(A) has erred in confirming the interest u/s 234C, 234B and 234C fo the Act. 2. The learned CIT(A) erred in confirming the initiation of penalty proceedings u/s 271(1)(c) of the Act. 2. Since the assessee has raised the issue of validity of re opening of the assessment under section 147 of the Income Tax Act, 1961 (for short the Act ), which goes to the root of the matter, therefore, we shall first proceed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tten off. Subsequent re opening is based on change of opinion as there was no fresh material or information came to the knowledge of the Assessing Officer after completion of assessment on 31st December 2007. In support of his contention, he relied upon the decision of the Hon'ble Jurisdictional High Court dated 28th January 2015 in CIT v/s Jet Speed Audio Pvt. Ltd., [2015] 230 Taxman 430 (Bom.). 6. On the other hand, the learned Departmental Representative relied upon the orders of the authorities below and submitted that this issue has been considered by the Assessing Officer and the learned Commissioner (Appeals) for the assessment year 2004 05 and the disallowance has been confirmed by the learned CIT(A) for the assessment year 2004 05, therefore, the claim of the assessee is not permissible as it was also decided for the assessment year 2004 05. He has further contended that the re opening is within four years and, therefore, it is not hit by proviso to section 147 of the Act. 7. We have considered the rival submissions as well as relevant material on record. The original assessment was completed under section 144 on 31st December 2007. Subsequently, vide notice date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment on 31st December 2007, the Assessing Officer considered the letter dated 26th December 2007 and, thereafter, the claim of the assessee in respect of the business loss of ` 35,25,000, was allowed. As it is clear from the reasons recorded by the Assessing Officer for re opening of the assessment that no fresh material or information came to the notice / knowledge of the Assessing Officer regarding this claim of business loss of ` 35,25,000, but the Assessing Officer has re opened the assessment on the belief that the said claim of business loss is not allowable as it is capital in nature. Hence, it is not the case of the Assessing Officer that any new material came to the knowledge subsequent to the order dated 31st December 2007. Therefore, the belief of the Assessing Officer that the income assessable to tax as escaped assessment in respect of the claim of business loss is not based on any tangible material came to the knowledge of the Assessing Officer subsequent to the original assessment but the said belief is based on the record already available with the Assessing Officer at the time of the assessment. It is clear that the re opening is based on change of opinion. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent order. At the time of passing assessment order, it expected of the Assessing Officer that he will apply mind and pass an order. An assessment order is not a mere scrap of paper. To accept the submission of Mr.Chhotaray, would mean to negate the well settled position in law as stated by the Supreme Court in the case CIT Vs. Kelvinator of India Ltd., [(2002) 256 ITR 1 (Delhi)(FB)] that the concept of 'change of opinion' brought in so as to have in built test to check abuse of power. In view of the above, we find no substance in the submissions raised by Mr.Chhotaray. 11. The decisions cited by Mr.Chhotaray, learned Counsel on behalf of the Revenue in support of his submissions that oversight in passing assessment order will give Assessing Officer jurisdiction to issue notice, placed heavy reliance upon the case Kalyanji Mavji Co. (supra). However, on the above aspect it has been held to be no longer good law by the subsequent decision of the Supreme Court in the case of Indian and Eastern Newspaper Society Vs. Commissioner of Income Tax, New Delhi, (119 ITR 996) wherein the Supreme Court has observed thus:- Now, in the case before us, the ITO had, when h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings are sought to be initiated, came to the notice of the Income tax Officer subsequent to the original assessment. If the income Tax Officer had considered and formed an opinion on the said material in the original assessment itself then he would be powerless to start the proceedings for reassessment. Where, however the Income Tax Officer had not considered the material and subsequently came by the material from the record itself, the such a case would fall within the scope of section 147 (b) of the Act (emphasis supplied). 13. The decision of Delhi High Court in the case New Light Trading Co. (supra) does not indicate what reasons were recorded for issuing notice of reopening therein. In the present case the reasons as recorded by the Assessing Officer and reproduced hereinabove clearly indicate that there was no tangible material adverting to the reasons recorded for issuing reopening notice. Similarly the decision of this Court in the case Dr.Amin's Pathology Laboratory (supra), it has been observed that if any item has escaped from assessment which otherwise is includible within the assessment and the Assessing Officer notices it subsequently by his own investig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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