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TMI Blog2019 (4) TMI 1424X X X X Extracts X X X X X X X X Extracts X X X X ..... l justice - HELD THAT:- Assessee was provided the reasons only on 25/2/2013 asking to file an objection up to 4/3/2013 and the objections were disposed off on 8/3/2013 whereas the final assessment order based on the above reason was passed on 20/3/2013. This clearly shows that the learned assessing officer has not followed the dictate of the decision of the in case of GKN driveshafts Ltd. Vs ITO [ 2002 (11) TMI 7 - SUPREME COURT] . Further the assessee was not given 4 weeks time after the rejection of the objections against the reopening of the assessment to explore the alternative remedy available to the assessee which is also contrary to the decision in case of ASIAN PAINTS LIMITED. VERSUS DEPUTY COMMISSIONER OF INCOME-TAX AND ANOTHER. [ 2007 (1) TMI 159 - BOMBAY HIGH COURT] wherein it has been specifically held that if Assessing Officer does not accept the objections so filed, he shall not proceed further in the matter within a period of four weeks from the date of receipt of service of the said order on objections, on the assessee. In the present case even before the service of the order rejecting the objections of the assessee the learned assessing officer as passed the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings u/s 147 is void, illegal, bad in law and unethical and should be quashed: a. The Learned Assessing officer has erred in law by disposing off objections raised by appellant company without recording any specific reason. b. The order disposing off objections filed by appellant company for re-assessment proceedings u/s 147 was served upon appellant company on 23rd March 2013 i.e. even after assessment order u/s 148 was served upon assessee. c. The Learned Assessing has passed order without considering grounds of objection as raised by appellant company. The Ld. AO has no where rejected objections raised by appellant company and instead passed order on his own presumptions. d. The Learned Assessing officer has erred in law by relying on case laws, facts of which are completely different from facts of appellant company and on contrary support claim of appellant that proceedings u/s 147 cannot be initiated as no new facts have come to notice of assessing officer other than those which were submitted at time of original assessment by appellant company. 3. The Learned Assessing officer has erred in law while initiating proceedings u/s 147 parallelly when proceedings u/s 154 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er has already passed assessment order under section 147 read with section 143 (3). The learned assessing officer also disposed of objections raised by appellant by order dated 08/03/2013 which was served on assessee on 23/03/2013 whereas original assessment order under section 147 read with section 143 (3) was passed on 20/3/2013. While passing order under section 147 read with section 143 (3) of income tax act learned assessing officer disallowed a sum of INR 1 0865713/- holding same that advances written off is capital expenditure and therefore disallowable. Consequently assessment order was passed at a total income of INR 1 0865713 in terms of order dated 20/3/2013. 3. The assessee aggrieved with order of learned assessing officer preferred an appeal before learned CIT - A. The assessee challenged order on merits of case as well as against reopening of assessment. The learned CIT - A has dismissed appeal on both the counts. Therefore, assessee is in appeal before us. 4. Supporting ground nos. 1 and 2 of appeal, learned authorised representative challenged reopening of assessment stating that a. Reopening is bad in law for reason that learned assessing officer was not justifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He further submitted that despite having the objection of the assessee, the learned AO rejected the objection simply stating that since the assessee has not attended and not file any objection prior to the appointed date the objections are not considered valid hence rejected. He submitted that firstly, the learned AO did not give the reasons in time and secondly after giving the reasons belatedly did not consider the objection on the merits of the case. He submitted that even only this issue if considered in light of the several decisions, the reopening of the assessment deserves to be quashed. He also referred to the reasons recorded at page number 147 of the paper book dated 22/03/2012. He stated that such reasons does not show any tangible material coming into the possession of the assessing officer after framing the original assessment proceedings. He submitted that the language used by the learned assessing officer, coupled with 154 proceedings initiated clearly shows that it is a bird satisfaction of the assessing officer. He referred to page number 52 of the paper book which is a notice under section 154 of the income tax act dated 10/8/2011 wherein the learned assessing off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om 200 (Madras)/[2018] 259 Taxman 266 (Madras) and stated that 76. Thus, certain aspects which is contemplated under the provisions of the Act, cannot be interpreted, so as to defeat the purpose for which such a provision was enacted by the Legislators. Constructive interpretation of the Act and the Rules are of paramount importance. The Rule of constructive interpretation requires that the possible object and the purpose to be achieved is met out by adopting not only the balancing approach, but also by providing all reasonable opportunities to the persons, who all are connected or aggrieved. She stated such an effort is made by the dl AO and assessee can not be aggrieved. In case an order is passed without following a prescribed procedure, the entire proceedings would not be vitiated. It would still be possible for the authority to proceed further after complying with the particular procedure. She stated that that a Judgment of the Court is not to be read as a statute. The factual background of the case is to be considered while applying the judgment and holding oneself bound by the rule of precedents. She further stated that that non compliance of the procedure indicated in the G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned AO further asked to furnish notes on applicability of section 2 (22) (e) of the act. The assessee submitted the details of loan and advances amounting to INR 1 0694113 as on 31st of March 2007 as per annexure 1. As per annexure 1, the assessee has given the details of the advance recoverable of INR 1 0865713 and shown less written off the same amount. On perusal of these documents of the query by the assessing officer and reply by the assessee it is apparent that the learned assessing officer has not raised any query about the advances written off by the assessee which is an item of the profit and loss account which assessee is trying to say that the learned assessing officer as an examination of the same which is only the statement of advances outstanding as on 31/03/2007. It is apparent that the learned assessing officer has not made any examination of this aspect with respect to the profit and loss account where these advances have been written off and claimed as allowable expenditure. Therefore, it cannot be said that the learned assessing officer has examined this issue during the course of assessment proceedings. In view of this, we do not subscribe that it is a change ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer would not have gone into the said question or applied his mind. However, this would depend upon the facts and circumstances of each case." Therefore there is no change of opinion and this argument of the learned authorised representative deserves to be rejected. 9. The main grievance of the learned authorised representative is that there is no tangible material coming into the possession of the assessing officer after completion of the assessment proceedings to reopen the case of the assessee. The reasons recorded by the learned assessing officer are placed at page number 147 of the paper book. The learned assessing officer recorded these reasons on 22/3/2012. The gist of the reason shows as under :- "During the assessment year 2007 - 08 it is notice that the assessee has debited an expense of INR 10865713/- on account of advances written off (advances recoverable from Manor hotels private limited) which was capital in nature and it should not be allowed as revenue expenditure. The assessee company has made a wrong claim. Therefore I have reason to believe that the above income, chargeable to tax has escaped assessment as per the section 147 of the income tax act 1961. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions were disposed off on 8/3/2013 whereas the final assessment order based on the above reason was passed on 20/3/2013. This clearly shows that the learned assessing officer has not followed the dictate of the decision of the honourable Supreme Court in case of GKN driveshafts Ltd. Vs ITO 259 ITR 19. Further the assessee was also not given 4 weeks time after the rejection of the objections against the reopening of the assessment to explore the alternative remedy available to the assessee which is also contrary to the decision of the honourable Bombay High Court in case of 290 ITR 90 wherein it has been specifically held that if Assessing Officer does not accept the objections so filed, he shall not proceed further in the matter within a period of four weeks from the date of receipt of service of the said order on objections, on the assessee. In the present case even before the service of the order rejecting the objections of the assessee the learned assessing officer as passed the assessment order on 20/3/2013. In view of this, there is a clear-cut violation of the principles of natural justice by the learned assessing officer and procedure deserves to be set right. But as we hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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