9911796707
TMI Blog2014 (3) TMI 1080X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,99,748/- available to the appellant was not mentioned by mistake while uploading return. The case was picked up for scrutiny and notice u/s 143(2) was issued. The AO disposed the application made u/s 154 on 9.11.2009 allowing set off of carry forward of unabsorbed depreciation relating to A.Y.1997-98 to 2005-06. The AO passed order u/s 143(3) on 09.12.2009 disallowing expenses to the tune of Rs. 1,80,639/- (25% of 2,22,557). This assessment was subsequently reopened by issue of notice under sec.148 on 07.02.2011. 3. The AO noted that the appellant had claimed brought forward unabsorbed depreciation loss of Rs. 4,43,88,186/- and set off to the extent of Rs. 4,27,99,748/- against income for A.Y.2007-08. The details of brought forward unabsorbed depreciation was follows:- Assessment Years Total in Rupees 1997-98 1,60,09,245 1998-99 1,33,70,497 1999-2000 12,32,953 2000-2001 69,40,858 2002-2003 63,90,858 2005-2006 4,43,775 Total 4,43,88,186 4. In the assessment, the A.O. did not allow set off of the carry forward unabsorbed depreciation relating to AY 1997-98 and 1998-99 for the reason that it could have been carried forward only for 8 years i.e., upto assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als) Visakhapatnam, erred in relying on the decision of the Hon'ble Income Tax Appellate Tribunal, Hyderabad, in the case of M/s.Dharthi Dredging v. Addl.CIT, Hyderabad without putting it to the appellant and also without giving even citation of the said case. Learned Commissioner of Income-tax is also not justified in not explaining in his order as to how the decision of Hon'ble Income Tax Appellate Tribunal is applicable in the facts of the Appellant's case in precedence over the decision of the Hon'ble High Court of Gujarat. Hence order passed by the learned Commissioner of Income Tax (Appeals) Visakhapatnam, is ab initio void and deserves cancellation. 4. The Commissioner of Income Tax (Appeals) Visakhapatnam, is also not justified in following the decision of the Hon'ble Income Tax Appellate Tribunal, Hyderabad, when there is a decision of a Higher Forum i.e., the decision of the Hon'ble Gujarat High Court, which is applicable on all fours in the facts and should therefore prevail over the order of the Hon'ble Income Tax Appellate Tribunal. Hence, the decision of the learned CIT(Appeals) Visakhapatnam is not in accordance with Law. The appellant, therefore, prays that the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A Nos.2414 and 2415/Mum/2012 order dated 09.10.2013 in M/s.Arch Fine Chemicals (P) Ltd. (ii) ITA No.352/Vizag/2008 order dated 13.04.2012 in Rajamahendri Shipping & Oil Field Services Ltd. 6. The learned Departmental Representative, on the other hand, drew the attention to the order of the Assessing Officer u/s 154 and pointed out that an error that occurred while filing the return electronically on the issue of carried forward losses, was rectified and it is not a case where a conscious decision was taken keeping in view of the decision of the Special Bench of the Tribunal in the case of DCIT v. M/s.Times Guaranty Limited (supra). Thus, he submitted that there is no change in the opinion as tried to be canvassed by the learned Counsel for the assessee. On the issue of carried forward unabsorbed depreciation, he submitted that the Hyderabad Bench of the Tribunal has considered all the decisions in the case of M/s.Dharti Dredging & Infrastructure Ltd. (supra). He submitted that the learned CIT(A) by following his decision has committed an error. He further pointed out that the Tribunal had considered the judgments of the Madras High Court in the case of CIT v. Pioneer Asia Packin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losses." It appears, that the Assessing Officer has not examined the legal aspect of this issue. As no express opinion has been stated on this issue and we hold that the Assessing Officer has not formed an opinion in the original order passed u/s 143(3). When the Assessing Officer has not formed an opinion during the course of original assessment proceedings, reopening cannot be said to be a change of opinion. 8.3 The second issue that was argued on the issue of reopening was absence of tangible material. It is well settled that in the absence of tangible material, reopening cannot be done. In this case based on the very same records and material the Assessing Officer reopened the case. This fact is not in dispute. 8.4 In the case of General Motors India Pvt. Ltd. (supra), on the issue of reopening, it was held as follows:- "Held : From the facts it is clear that there was no omission or failure on the part ;of the assessee to make a return under s.139. The assessee had disclosed fully and truly all material facts necessary for his assessment for the year. Nor subsequently, the AO had any tangible material on record, on the basis of which he could have formed his opinion or co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f opinion. Merely because the AO did not give reasons for allowing the claim of unabsorbed depreciation in the original assessment order would not make the assessment order illegal. The AO, in law, must be deemed to have formed an opinion that the assessee's claim deserves to be accepted. Thus, in such a situation, the original assessment order cannot be reopened as it would amount to change of opinion by the AO and the reassessment order is liable to be set aside. - CIT vs. Kelvinator of India Ltd. (2010) 228 CTR (SC) 448 : (2010) 34 DTR (SC) 49 : (2010) 320 ITR 561 (SC) and Gujarat Power Corporation Ltd. vs. Asstt. CIT (2012) 77 DTR (Guj) 89 relied on. Conclusion : AO has the power to reopen the assessment proceedings if some tangible material had come to his knowledge but he cannot reopen the assessment merely because on the same documents considered earlier by him, another inference was possible; AO cannot take benefit of his own wrong and reopen the assessment proceedings under s. 147; it would be a case of second thought on the same material and the omission to draw the correct legal presumption during the original assessment proceedings did not warrant initiation of procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation from asst. yr. 1997-98 upto the asst. yr. 2001-02 got carried forward to the asst. yr. 2002-03 and became part thereof, it came to be governed by the provisions of s. 32(2) as amended by Finance Act, 2001 and was available for carry forward and set off against the profits and gains of subsequent years, without any limit whatsoever. Conclusion : Amendment of s. 32(2) by Finance Act, 2001 is applicable from asst. yr. 2002-03 and subsequent years and therefore unabsorbed depreciation from asst. yr.1997-98 upto the asst. yr. 2001-02 got carried forward to the asst. yr. 2002-03 and became part thereof, it came to be governed by the provisions of s. 32(2) as amended by Finance Act, 2001 and was available for carry forward and set off against the profits and gains of subsequent years, without any limit whatsoever." 8.7 The reliance was placed by the learned Departmental Representative on the decision of the Hyderabad `A' Bench of the Tribunal in the case of M/s.Dharti Dredging & Infrastructure Ltd. (supra). In this decision, the Bench referred the judgments of the Madras High Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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