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TMI Blog2019 (2) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... fresh material having live link to the formation of the A.O.’s belief that there was any escapement of income. Furthermore, the very fact that it has been duly made clear that the outstanding bogus was in the nature of customary bonus not covered u/s. 43B(C), there was no question of the same being subject to section 36(1)(ii) de hors any contrary finding by the A.O. It is settled law that the reopening on the basis of the change of opinion is not permissible under the Act. For this proposition, we placed reliance upon the Hon’ble Apex Court decision in the case of CIT vs. Foramer France [2003 (1) TMI 101 - SUPREME COURT]. Accordingly, the reopening of this case is held to be invalid and the assessment framed there-under is thus quashed. As regards the merits of the case, it is duly noted that the assessee has submitted that the outstanding bonus was customary bonus and not filing u/s. 36(1)(ii) to come under the ambit of disallowance u/s. 43B(C). The assessee has quoted several case laws for the proposition that the customary bonus do not attract the rigors of provision of section 36(1)(ii) which are applicable to bonus payable under payment of Bonus Act. Accordingly, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings. The Appellant Company prays that the re-assessment proceedings u/s. 147 of the Act are invalid and the order u/s. 143(3) r.w.s. 147 dated November 03, 2015 be quashed accordingly. 2. Without prejudice to Ground 1 above, assuming without accepting that the claim customary bonus of ₹ 16,52,15,683 is disallowed by invoking the provisions of Section 43B, on the facts and in the circumstances of the case and in law, the appellant submits that the learned DCII be directed to allow the sum of ₹ 16,52,15,683 on payment basis in the year of payment and reduce the total income accordingly. 4. Brief state facts of the case are that the reassessment notice was issued to tax unpaid bonus u/s. 43B and the addition to that effect was done in reassessment. The assessee challenged both the validity of reopening as well as merit of addition. 5. The reason for reopening is as under: On verification of the record, it was noticed that tax auditor has reported vide clause 21B in 3CD report that, the bonus amounting to ₹ 56,28,38,981/- was paid before the due date for furnishing of the return u/s. 139(1) out of ₹ 72,80,54,664/- which was shown as payable as on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e: ₹ 16,52,15,683/-] 7. The ld. CIT(A) dismissed the challenge to validity of reopening by laconically holding that the assessee was not opposed to reopening of the case in initial stage and opposed merely because certain additional/disallowance has been done by the A.O. In this regard, we note the submission of the ld. Counsel of the assessee that the ld. CIT(A) has not at all adjudicated the issue raised. We note that the ld. CIT(A) has reproduced the objection to reopening by the assessee but has dismissed the same by holding as under: 5.3. I have considered the stand of the AO, submission of appellant and the facts and circumstances of the case. I have also considered the judicial pronouncements referred and relied upon by the appellant. It is seen that the AO re-opened the file by issuing notice u/ s.148 dated 30.03.2015 and the appellant in response vide letter dated 21.04.2015 submitted that the return of income filed by the assessee on 05.11.2009 may be treated as return of income filed in response to notice u/s.148 of the I T Act, 1961. Thus, it is a case where the appellant was not opposed to the re-opening of the case at the initial stage and has opposed m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so far as assessment order is concerned, the AO has not discussed the legal submission of the appellant at all. Further in AO's letter dated 21.08.2015 the AO has merely stated that the quoted judgements pertains to 36(1)(ii) and another is related to the sum payable by the employer in lieu of leave amount respectively and therefore, the case law did not apply in favour of the appellant. 10. Thereafter, he has produced the case law and finally concluded as under: 6.3.4 In view of the above facts as well as judicial pronouncements, it will be difficult to sustain the disallowance made by the A.O. Accordingly, the A.O. is directed to delete the disallowance of ₹ 16,52,15,638/-. 9. Against the above order, the Revenue is in appeal before us and the assessee has filed the cross objection. 10. We have heard both the counsel and perused the records. As regards the challenge to reopening, we note that earlier the assessment order was passed u/s. 143(3) of the Act. With regard to the issue of nature of outstanding payment due for bonus, there was a note in the tax audit report to the effect that the said amount was customary bonus not covered u/s. 43B(C) and in su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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