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TMI Blog2018 (7) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... ice tax was shown in the liabilities grouping under sundry creditors which is to be disallowed u/s 43B of I.T.Act., and not an allowable expenditure. Thus, the AO formed the belief that the income chargeable to tax, has escaped assessment and accordingly issued the notice u/s 148 of I.T.Act. Though the AO has mentioned decision of CIT Vs. Associated Pigments Ltd. [1993 (6) TMI 249 - CALCUTTA HIGH COURT] in the reasons to take the support, the AO has not relied on the decision of Associated Pigments Ltd., for forming the belief. The verification of original assessment order passed u/s 143(3) shows that the AO has not examined the issue at the time of making the assessment u/s 143(3) on 31.12.2008. AO has not examined the issue and taken a stand regarding the allowability of unpaid service tax which was grouped under the head sundry creditors. From the above, it is established that the AO has not formed any opinion at the time of original assessment, hence it cannot be called as change of opinion. We hold that there is no change of opinion in the assesseee’s case and the action of the AO in reopening the assessment is upheld. Accordingly, we set aside the order of the CIT(A) and u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment u/s 147, the assessee submitted before the CIT(A) that there was no fresh information or material which has come to the notice of the AO for reopening of the assessment, thus argued that assessment was reopened merely on change of opinion, hence invalid. The Ld.CIT(A) agreed with the view of assessee that reopening of assessment was made on change of opinion and accordingly quashed the notice issued u/s 148. The Ld.CIT(A) relied on the decision of CIT Vs. Kelvinator India Ltd. 320 ITR 561(SC) and the decision of Hon ble Delhi High Court in the case of CIT Vs. Kelvinator India Ltd. 256 ITR 1(Del.). 4. Aggrieved by the order of the Ld.CIT(A), the revenue has taken up the matter before the Tribunal and raised the following grounds : a. The Ld. CIT(A) erred both in law and in facts of the case. b. The Ld. CIT(A) ought to have not held that there is change of opinion. The A.O. has not called for the details regarding the payment of service tax and there is no finding either positive or negative arrived at during the course of original assessment proceedings. c. Reliance is placed on the following judicial pronouncements. (i) ALA Firm vs CIT (Mds) 102 ITR 622 (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ror pointed out by audit party is permissible under law. The Ld.DR further relied on the decision of Hon ble Delhi High Court in the case of Dalmia Brothers (P.) Ltd. Vs. CIT, 16 taxmann.com 336 (Delhi). 6. On the other hand, the Ld.AR argued that reopening of assessment was made merely on the change of opinion. There was no fresh information or fresh material available to the AO to form the belief to hold that the income has escaped assessment within the meaning of Section 147 of I.T.Act. The Ld.AR further argued that the case law relied upon by the Ld.DR is distinguishable on the facts of the assessee s case. In the case of CIT Vs. PVS Beedies (supra) Hon ble Supreme Court held that the audit party is entitled to point out a factual error or omission in the assessment, whereas in the instant case, the AO reopened the assessment merely relying on the decision of Hon ble Kolkata High Court which is a legal issue. The Ld.AR submitted that, on legal issue, the assessment cannot be reopened on the basis of audit objection. Hence, argued that the reopening of assessment is nothing but a mere change of opinion, thus the Ld.CIT(A) has rightly set aside the assessment and quashed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment in the impugned appeal. 8. We have heard both the parties and perused the material placed on record. At the outset, we take up the issue of validity assessment made on a dead person first. In this case, the revenue has filed the appeal, but the assessee has neither filed cross objections nor filed the appeal against the order of the Ld.CIT(A). Hence, the Ld.DR argued that the assessee cannot object the validity of the assessment without there being an appeal or cross objections filed by the assessee. On the other hand, the Ld.AR argued that the assessee is having right to defend the case as per Rule 27 of IT Rules which is having a bearing on the issue, even though no appeal is filed or agitated the issue in appeal. The ITAT Delhi Bench in the case of ITO Vs. Jyoti Global Pvt. Ltd. (1010) 29 CCH 0929 held that Rule 27 stipulates that respondent even if not filed any appeal before the ITAT, he can support the order impugned in the appeal by the appellant on any of the grounds which has been decided against him. For ready reference, we extract para No. 5 and 6 of the relevant part of the order of the Coordinate Bench cited supra which reads as under: 5. We have du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re CTT(A) opts not to file crossobjection even when an appeal has been preferred by the other party, from that it is not possible to infer that the said party has accepted the order or the part thereof which was against the respondent. The Tribunal has, in the present case, unfortunately drawn such an inference which is not supported by the plain language employed by the provision. 18. If the inference drawn by the Tribunal is accepted as a correct proposition, it would render r. 27 of the Tribunal Rules redundant and nugatory. It is not possible to interpret the provision in such manner. Any interpretation placed on a provision has to be in harmony with the other provisions under the Act or the connected Rules and an interpretation which makes other connected provisions otiose has to be to avoided Rule 27 of the Tribunal Rules is clear and unambiguous. The right granted to the respondent by the said rule cannot be taken away by the Tribunal by referring to provisions of s 253(4) of the Act. The Tribunal was, therefore, in error in holding that the finding recorded by the CIT(A) remained unchallenged since the assessee had not filed cross-objections. 19. Accordingly, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, it is evident that framing the assessment in the name of a dead person is nothing but a clerical error which is a curable mistake u/s 292B of I.T.Act. Similar issue has come up before the ITAT Kolkata Bench in the case of Gautam Paul Vs. ACIT, Circle Agartala (supra) and the coordinate bench held that it is a curable mistake and there is no jurisdictional defect. The Hon ble ITAT, Kolkata relied on the decision of the Hon ble Punjab and Haryana High Court in the case of Smt.Swarna Kanta Vs, CIT 176 ITR 291 (P H). For ready reference, we extract relevant paragraph of the order of the Coordinate Bench of Kolkata in the case of Gautam Paul Vs. ACIT, Circle Agartala (supra) which reads as under : 7.3.1. We find that the provisions of section 292B of the Act reads as follows:- Return of income, etc., not to be invalid on certain grounds. 292B. No return of income, assessment notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed on the dead person but on the legal heir of the deceased We agree with the departmental representative that merely by virtue of mistake the name of the deceased was written at the top of the assessment order. It is simply a - clerical error which has no adverse effect on the proceedings within the meaning of section 292B. 4. We are of the opinion that the Tribunal came to the correct conclusion. There is clearly a clerical error or omission in the heading of the assessment order. The correct description of the assessee to be reduced in the heading against item No. 2 should have been Sain Doss Aabbi deceased through Smt.Swaran Kanto legal heir. It has to be seen whether order, could be read to mean, to the aforesaid effect on the peculiar facts of this case. Section 159 of the Act relates to liability' of the legal representative, of the deceased assessee According to section 159(2)(a), any proceedings taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the death of the deceased and for completing the proceedings by vir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ully following the said decision, we hold that the assessments for the Asst Years 2007-08 to 2012- 13 u/s 153A / 144 of the Act and for the Asst Year 2013-14 u/s 144 of the Act have been validly framed and accordingly the grounds raised by the assessee are dismissed. 9.1. Hon ble Supreme Court in the case of Sky Light Hospitality LLP Vs. ACIT (supra) held that reassessment notice issued in the name of erstwhile company despite the company ceasing to exist as it had been converted into LLP would not invalidate the reassessment proceedings as wrong name mentioned in the said notice which was merely a clerical error which could be corrected u/s 292B of I.T.Act. The Hon ble Supreme Court s decision in the case of Sky Light Hospitality LLP Vs. ACIT (supra) supports the view that wrong name given in the notice is merely a clerical error which could be corrected u/s 292B of I.T.Act and assessee s case is covered by the decision of ITAT in the case of Gautam Paul Vs. ACIT, Circle Agartala,(Supra).In the instant case the legal heir was given sufficient opportunity and he has submitted the required information. Hence, we hold that mentioning the name of the assessee, a dead person, on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed u/s 43B of I.T.Act., and not an allowable expenditure. Thus, the AO formed the belief that the income chargeable to tax, has escaped assessment and accordingly issued the notice u/s 148 of I.T.Act. Though the AO has mentioned decision of CIT Vs. Associated Pigments Ltd. (supra) in the reasons to take the support, the AO has not relied on the decision of Associated Pigments Ltd., for forming the belief. The verification of original assessment order passed u/s 143(3) shows that the AO has not examined the issue at the time of making the assessment u/s 143(3) on 31.12.2008. The Ld.DR also submitted that the AO has not verified the issue at the time of original assessment. The Ld.AR did not furnish any evidence to establish that the AO has examined the issue at the time of making the original assessment u/s 143(3). Thus, it is clear that the AO has not examined the issue and taken a stand regarding the allowability of unpaid service tax which was grouped under the head sundry creditors. From the above, it is established that the AO has not formed any opinion at the time of original assessment, hence it cannot be called as change of opinion. As per the CIT(A) order, the issue has com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection and then examined by the authorities. This factual lapse was found to be correct and, therefore, reassessment proceedings were initiated. Initiation of the reassessment proceedings has been held to be proper in view of the decision of the Supreme Court in CIT V. PV'S Beedies (P.) Ltd [1999]237 ITR 13/103 Taxman 294 and the Delhi High Court in News Light Trading Co. v. CIT [2002] 256 ITR 391 /[2001] 117 Taxman 741. 10.3. The Ld.CIT(A) relied on the decision of Kelvinator India Ltd., wherein, Hon ble Apex Court held that reopening of assessment on change of opinion is not permissible. As per the discussion made in this order, we have already held that, the AO has not verified the issue and did not form any opinion, thus there is no change of opinion. Hon ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers P. Limited (supra) held that for reopening the assessment within four years belief of the AO is sufficient. For ready reference, we extract relevant part of the decision of Hon ble Supreme Court which reads as under : 16. Section 147 authorises and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or truly all material facts necessary for his assessment of that year. Both these conditions were conditions precedent to be satisfied before the Assessing Officer could have jurisdiction to issue notice under section 148 read with section 147(a). But under the substituted section 147 existence of only the first condition suffices. In other words if the Assessing Officer for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. It is however to be noted that both the conditions must be fulfilled if the case falls within the ambit of the proviso to section 147. The case at hand is covered by the main provision and not the proviso. 18. So long as the ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate proceeding under section 147 and failure to take steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings even when intimation under section 143(1) had been issued. Therefore, we hold that there is no change of opinion in the assesseee s case and the action of the AO in reopening the assessment is upheld. Accordingly, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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