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TMI Blog2018 (12) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin a period of 8 years vide amendment made in law. In support of this fact assessee submitted before the CIT(A) the text of the audit objection. Notice u/s 147/148 in the assessee’s case was issued on the basis of point of law raised. This by itself exposes the invalidity of the action of issuance of notice u/s 148 of the Act. It is well established principle of law that resort to proceedings u/s 147 r.w.s 148 cannot be had to on a question of law raised by audit party. This law has been laid down in the case of CIT vs. Lucas TVS Ltd. [2000 (12) TMI 102 - SUPREME COURT], wherein held an audit opinion in regard to the application or interpretation of law cannot be treated as information for reopening the assessment under s. 147(b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng escaped assessment byallowance of unabsorbed depreciation for the A.Y. 1998-99 tothe extent of ₹ 7,68,058/- since unabsorbed depreciation forthe A.Y. 1998-99 was alive on the date of amendment w.e.f. 01.04.2002 since the time limit of 8 years specified by pre-amended law had not expired. As such, the said depreciationhas come to be governed by the law existing on or after 01.04.2002 and continued to exist during the assessment yearin question. Therefore, the allowance of carry forward of thesaid depreciation is perfectly justified under law in the factsand circumstances of the case. c. Because the notice u/s 148 has to be issued on the basis of reason to believe, whereas in the case in hand, there is no tangible material to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Subsequently, the case was selected for scrutiny and notices u/s 142(1) 143(3) were issued and served on the assessee. The assessment was completed u/s 143(3) of the Act, on 23.12.2008, at assessed income of ₹ 3,38,521/-. 5. Later on, the assessee s case was reopened u/s 147 of the Income Tax Act, 1961 by issuing notice u/s 148 of the Act, dated 25.03.2013. The assessing officer on careful examination of the accounts, assessment order and records of the assessee company for the Assessment Year 2006-07, found that the assessee has set off brought forward depreciation loss of ₹ 13,82,054/- for Assessment Year 1997-98 and ₹ 23,17,557/- for Assessment Year 1998-99. As per Finance Act, 1996 Circular No.762 dated 18.02.199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n response, the assessee submitted that reopening was done on the basis of the issue raised by the audit party on a question of law, therefore, reopening is bad in law. 7. Ld Assessing officer rejected the contention of the assessee and held as follows: Furthermore, it is clear that the provision of section 32(2) substituted by Finance Act, 1996 w.e.f. 01.04.1997, unabsorbed depreciation allowance upto Assessment Year 1996-97 shall be added to such allowance of the Assessment Year 1997-98 and will be deemed to be the allowance of that year. Carry forward and set off of unabsorbed depreciation for the Assessment Year 1997- 98 was to be allowed for subsequent eight Assessment Years. In view of the above, assessee had the option to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussed in our earlier para and is not repeated for the sake of brevity. 10. After hearing the ld DR for the Revenue, we note thatthe impugned assessment order stand challenged on account of the facts that the notice u/s 148 r.w. section 147 of the Act, was issued on the basis of audit objection on aissue which is the point of law. The issue of law pointed out by the Audit objection was relatable to the set off of unabsorbed depreciation relating to the Assessment Year 1998-99, the set off of which to the extent of ₹ 3,38,521/- stands allowed against the income of year in the question and set off of ₹ 12,10,970/- was allowed in the preceding Assessment Year and the balance in subsequent Assessment Year. According to the au ..... X X X X Extracts X X X X X X X X Extracts X X X X
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