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TMI Blog2018 (2) TMI 977X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-2-2018 - Shri D.T. Garasia, Judicial Member And Shri Rajesh Kumar, Accountant Member For The Appellant : Shri Mani Jain For The Respondent : Shri Rajesh Kumar Yadav ORDER Per Rajesh Kumar, AM These appeals have been filed by the assessee against the orders of the CIT(A)-38, Mumbai dated 29.01.2014 and 30.01.2014 for assessment years 2006-07 and 2007-08 respectively. 2. Assessee has raised the following grounds of appeal: - 1. On the facts and circumstances of the Appellant's case and in law the Ld. CIT(A) erred in confirming the action of A.O. in reopening the assessment u/s 147 of the Income Tax Act, 1961 by extracting the reasons from the records which have been duly disclosed by the appellant in the return of income or financial statements filed during the course of assessment proceedings. 2. On the facts and circumstances of the Appellant's case and in law the Ld. CIT(A) erred in confirming the action of A.O. in passing the impugned order which is illegal or otherwise void for the want of jurisdiction. 3. On the facts and circumstances of the Appellant's case and in law the Ld. CIT(A) erred in confirming the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expenses suo motto in the computation of income. After confronting the issue with the assessee, the AO added the same under Section 40(a)(ia) of the Act on the ground that the assessee did not object to the disallowance. On the issue of provision for gratuity, the assessee has made a provision of ₹ 1,62,10,000/- for gratuity during the year and suo moto disallowed an amount of ₹ 1,58,18,347/-. According to the AO the said provision is not an allowable expenses under Section 43B(b) of the Act. Therefore he added the difference between the said two amounts of ₹ 3,91,653/- to the income of the assessee and finally assessed the income at ₹ 19,12,88,617/- by framing the assessment under Section 143(3) r.w.s. 147 of the Act vide order dated 24.11.2011. Assessee challenged the reopening of assessment before the First Appellate Authority by submitting that reopening was based upon change of opinion on the same facts which were already available in the assessment record. By relying on various decisions as cited by the CIT(A) in para 4.2 of his order, the CIT(A) dismissed the appeal of the assessee by observing and holding as under: - 5.0 I have carefully exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng is to be against the assessee or any claim put forth by the assessee is denied. We are of the clear opinion that there cannot be any dichotomy of this nature as every conclusion and finding by the assessing authority should be supported by reasons, however brief it may be, and in a situation where it is only a question of computation in accordance with the relevant articles of a double taxation avoidance agreement and that should be clearly indicated in the order of the assessing authority, whether or not the assessee had given particulars or details of it. It is the duty of the assessing authority to do that and if the assessing authority had failed in that, more so in extending a tax relief to the assessee, the order definitely constitutes an order not merely erroneous but also prejudicial to the interests of the Revenue and therefore, while the Commissioner was justified in exercising the jurisdiction under section 263 of the Act, the Tribunal was definitely not justified in interfering with this order of the Commissioner in its appellate jurisdiction. 5.2 Since in the case of the appellant nothing came to light establishing application of mind by the A.O. on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the AO has examined the statement of total income in the original assessment proceedings and in para 31 at page 17 of the paper book the AO further stated that an amount of ₹ 1,11,44,023/- was outstanding under Section 43B of the Act on the date of audit as stated in tax audit report form 3CD clause No. 21(1)(b). The learned A.R. submitted that the AO has reviewed his own order by reopening the already concluded assessment on the basis of information and records which were available before him at the time of original assessment to form an opinion that income has escaped assessment which is nothing but a change of opinion which is not permissible under the Act . In defence of his arguments the learned A.R. relied on a series of decisions, viz.:- ( i) CIT vs. Kelvinator of India Ltd. (2010) 187 Taxman 312 (SC) ( ii) OHM Stock Brokers (P.) Ltd. vs. CIT (2013) 31 taxmann.com 354 (Bom) ( iii) J.V. Gokal Co. vs. ACIT (2015) 53 taxmann.com 494 (Mum- Trib) The learned A.R. finally submitted before the Bench that in view of the ratio laid down by the Hon'ble Supreme Court and various other Hon'ble High Courts on the issue, the assessment proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion relied upon by the Revenue in the case of ACIT vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd. (supra) and Raymond Woollen Mills Ltd. (supra) do not come to the rescue of the Revenue as the same were distinguishable on facts and not applicable to the present case. In the case of Rajesh Jhaveri Stock Brokers Pvt. Ltd. the return was processed under Section 143(1) and no assessment was framed under Section 143(3) of the Act and the Hon'ble Apex Court has held that the failure to take steps under section 143(3) will not render the AO powerless to initiate reassessment proceedings. In the case of Raymond Woollen Mills Ltd. the facts were obtained by the Revenue from the subsequent year s assessment proceedings. In view of the above said discussion and the ratio laid down by the Hon'ble Apex Court in the case of Kelvinator of India Ltd. (supra) we are of the view that the reassessment proceedings were invalidly initiated and accordingly quashed. Since we have quashed the re-assessment proceedings, the issues raised on merits need no adjudication. 7. In the result, appeal of the assessee is allowed. 8. In ITA No. 2513/Mum/2014 for A.Y. 2007-08 the assessee has raised identic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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