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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 ..... 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 adjudicate ground no.2 of the assessee's appeal. 3. The original assessment was completed under section 144 of the Act, on 31st December 2007. Subsequently, the Assessing Officer re-opened the assessment by issuing a notice dated 22nd March 2010 under section 148 of the Act. The assessee, vide its letter dated 8th April 2010, objected to the re-opening of the assessment on the ground that the complete details of writing-off of the amount is business loss were filed before the Assessing Officer and the Assessing Officer, in the original assessment proceedings, accepted the claim of the assessee after considering the reply of the assessee. Therefore, the assessee took objection that the re-opening is based on change of opinion which is not sustainable in view of the judgment of the Hon'ble Delhi High Court in DCIT v/s Kalvinator of India Ltd., [2002] 75 TTJ 966 (Del), which has been confirmed by the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 dated 22nd March 2010, under section 148 of the Act, the Assessing Officer re-opened the assessment by recording the reasons as under:- "In this case order u/s 144 was passed on 31.12.2007 on the assessed income of ` 17,91,17,060 against the returned loss of ` 1,16,29,290. During the verification of case records, it is seen that the assessee claimed loans written off amounting to ` 35.25 lakhs and debited the same to the Profit & Loss account. This is in the nature of capital loss and cannot be treated as revenue expenditure. This has remained to be disallowed. In view of the facts and circumstances, I have no reasons to belief that the income of ` 35.25 lakhs has escaped assessment and this is a fit case for issue of notice u/s 148 of the Act." 8. Thus, it is clear that the Assessing Officer has re-opened the assessment on the ground that the assessee claimed loss written-off amounting to ` 35,25,000, which acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Hon'ble Jurisdictional High Court in Jet Speed Audio Pvt. Ltd. (supra), while considering identical issue, has held in Para-9 to 13 as under:- "9. We find that the impugned order of the Tribunal has rendered a finding of fact on the basis of material before it, in particular the fact that during original assessment proceedings a query was made with regard to the same issue which was responded to by the respondent - Assessee and on satisfaction of the same, the Assessing Officer had passed an assessment order. Therefore, reopening of assessment on an issue in respect of which a query was raised and responded to by the assessee would amount to a change of opinion. The tangible material being urged before us by Mr.Chhotaray, is the audit objections received by the Assessing Officer. However, as would be clear from the reasons reproduced hereinabove, there is no mention of any tangible material in the reasons rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od 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 he made the original assessment, considered the provisions of S.9 and 10. Any different view taken by him afterwards on the application of those provisions would amount to a change of opinion on material already considered by him. The revenue contends that it is open to him to do so, and on that basis to reopen the assessment under s.147(b). Reliance is placed on Kalyanji Mavji & Co. V. CIT (1976) 102 ITR 287 (SC), where a Bench of two learned Judges of this court observed that a case where income had escaped assessment due to the "oversight, inadvertence or mistake" of the ITO must fall within S.34(1)(b) of the Indian I.T.Act,1922. It appears to us, with respect that the proposition is stated too widely and travels farther than the statute warrants in so far as it can be said to lay down that if, on reappraising the material considered by him during the original assessment, the ITO discovers that he has committed an error in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 investigation or by reason of some information received by him, one cannot say that it constitutes change of opinion. In the present facts during original proceedings itself this issue was investigated by the Assessing Officer by raising specific query with regard to bad debts of Rs. 1.35 crores. Consequently, this is not a case where this information has been noticed by the Assessing Officer subsequently in the assessment proceedings. In view of the above, in our opinion, none of the three decisions are applicable in the present facts." 10. Following the aforesaid judgment of the Hon'ble Jurisdictional High Court in Jet Speed Audio Pvt. Ltd. (supra), we set aside the re-opening of the assessment and consequent re-assessment. Ground no.2, raised by the assessee is allowed. 11. Since we have quashed the re-assessment, therefore, the other grounds, as raised by the assessee, become infructuous and do not require any adjudication. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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