9911796707
TMI Blog2021 (1) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... Act vide order dated 22.12.2010, determining the total income of the assessee at Rs. 2,32,870/-. It may be noted here that in para 5 the AO in this order noted that a sum of Rs. 11,13,955/- has been claimed on account of interest paid on loans raised from different banks. The AO asked the assessee to furnish bank/party wise details which was filed the AO noted that loan has also been raised for construction of house but no bifurcation of the loan could be given by the assessee. In absence of any clear bifurcation the assessee surrendered a sum of Rs. 50,000/- on the interest paid which was disallowed by the AO. Thereafter, proceeding u/s 147 of the Act were initiated after recording the reasons, notice u/s 148 was issued on dated 31.03.2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions were not audited by the Chartered Accountant resulting in incomplete audit. Since the complete audit was not conducted by the auditor assessee shall be treated in default for not conducting the audit for which he was liable to pay penalty of Rs. 1,00,000/- u/s 271B. Since the interest on borrowed capital amounting to Rs. 11,13,955/- was claimed as deduction through statement of taxable income, assessee was required to deduct TDS on such payment. As the payment was made out of books, assessee had not deducted TDS on such interest which needed to be disallowed u/s 40(a)(ia) of the Act. Omission resulted in under assessment of income of Rs. 11,13,955/-. In view of the above facts, I have reasons to believe that the assessee had an in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment are reproduced above in which AO has specifically mentioned that the entire interest of Rs. 11,13,955/- needed to be disallowed. This omission which resulted in under assessment of income of Rs. 11,13,955/-, therefore, he formed his opinion that income chargeable to tax to this amount has escaped assessment. It is an admitted fact that originally the AO passed the assessment u/s 143(3) of the Act dated 22.12.2010 and out of the impugned amount of Rs. 11,13,955/- disallowed Rs. 50,000/- only. Thus, assessee disclosed all the primary facts with regard to deduction claimed on account of interest paid on loans at the original assessment stage and is considered by the AO also at original assessment stage, therefore, there is no failure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer had not recorded the failure on the part of the petitioner to fully and truly disclose all material facts necessary for the AY 1997-98. What was recorded was that the petitioner had wrongly claimed certain deductions which he was not entitled to. The reassessment proceedings initiated in the year 2004 were not valid." 8. Hon'ble Delhi High Court in the case of Techman Buildwell 370 ITR 771 held that AO's omission sole basis of initiating proceedings u/s 148 of the Act, notice not valid. 9. Considering the above discussion, it is clear that at the original assessment stage AO considered the issue of claim of deduction on account of interest to the banks and others and as such, on mere change of opinion AO could not have reopened th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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