9911796707
TMI Blog2010 (10) TMI 1124X X X X Extracts X X X X X X X X Extracts X X X X ..... amounting to ₹ 3,76,70,000/- is allowable u/s 80-P(2)(a)(i) of the Income-tax Act, 1961 to the assessee." 2. The assessee invoked Rule 27 of the Income Tax Appellate Tribunal Rule, 1963 and raised the following grounds : 1. The ld. CIT(A) failed to appreciate that the assessment has been reopened on mere change of opinion and there was full and complete disclosure of facts in the course of original assessment which was completed u/s 143(3) and therefore the notice u/s 148 dt. 30/3/2007 is bad in law. 2. The ld. CIT(A) failed to appreciate the fact that the Assessing Officer has applied his mind on the issue of profit of ₹ 3,76,70,000/- on sale of Government securities in the course of Assessment proceeding as he had specifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nking Regulation Act. It is having a banking licence from Reserve Bank of India. It carries on the business of banking. The assessee is also registered under the Maharashtra Cooperative Societies Act, 1960. It filed its return of income on 25-11-2003, declaring Nil income. The AO after due enquiry, passed an order u/s 143(3) on 19-12-2005 determining the taxable income at Nil. Thereafter a notice u/s 148 was issued on 30-3-2007. The same was received by the assessee on 10-4- 2007. In response, the assessee filed a revised return on 26-4-2007 declaring Nil income. The AO issued notice u/s 142(1). Thereafter he asked the assessee, the reasons as to why deduction u/s 80P should not be allowed on profit on sale of Government securities amountin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order was passed u/s 143(3) on 19-12-2005, though the assessment order is brief and cryptic, the assessment record shows that the AO has sought clarifications from the assessee on this issue. In the questioner issued on 3rd June, 2005 at para 7 the AO questioned as follows : " Please explain Profit on Sale of Govt. Securities giving details like opening stock, purchase, sale and closing stock. Please explain how the same can be classified as banking activity as per the Banking Regulation Act. " In a letter dated 28-11-2005 at para 7, the AO asked as follows : " Substantiate your claim for deduction U/s 80P for the following items : a) Interest & Discount 1,26,10,607.92/- b) Dividend on Investments 120.00/- c) Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, nor the assessee company has offered the same in its computation. Omission to do so had resulted in under assessment of income to that extent. Therefore, I have reason to believe that an amount of ₹ 3,76,70,000/- has escaped assessment." 10. From the above reasons, it is clearly evident, that reopening of assessment was made on a mere change of opinion. This is not permissible in law. The Hon'ble Supreme Court in the case of CIT vs. Kelvinator of India Ltd. 320 ITR 561 held that reopening cannot be done on a mere change of opinion. Once the AO has asked a specific question, got a detailed reply and thereafter took a decision, the question of reopening the assessment on the same issue, tantamounts to reopening on a change of opin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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