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TMI Blog2021 (5) TMI 522X X X X Extracts X X X X X X X X Extracts X X X X ..... ties Pvt. Ltd. [ 2006 (3) TMI 212 - ITAT DELHI-A] does not provide any fruitful support of the revenue in the peculiar facts and circumstances of the legal contention and grounds of the assessee in the present case. From the reasons recorded by the AO before initiating reassessment proceedings u/s. 147 of the Act and issuance of notice u/s. 148 of the Act, we are unable to see any tangible material in the hands of the AO which was not before him at the time of processing return of income u/s. 143(1)(a) of the Act. Therefore, the provisions rendered by Hon'ble Supreme Court in the case of Kelvinator of India Ltd.[ 2010 (1) TMI 11 - SUPREME COURT ] is applicable in favour of the assessee and consequently, we hold that the AO proceeded to initiate reassessment proceedings u/s. 147 of the Act and issuance of notice u/s. 148 of the Act without any new tangible material and without application of mind merely on the strength of direction of Ld. CIT(A) that the suitable course of action available to the AO under the Act is application of provisions of section 147 of the I.T. Act as the appellant has understated its income by not applying the provisions of section 115JB of the I.T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h many difficulties; therefore, the payment of fees does not make appeal time barred especially when the defect has been rectified by way of submitting proof of payment of complete fees. 4. In view of above, we are of the considered opinion that this appeal has been filed by the assessee within the prescribed time period and there is no delay in filing the appeal before the Tribunal. The payment of short fee cannot be a ground for alleging the appeal as time barred. Therefore, the application of the assessee is disposed of by holding that this appeal has been filed by the assessee within the time limit and there is no delay. 5. The assessee has raised the following grounds: A. That the re-opening of assessment based on a suggestion of the Learned C.I.T.(A) to modify the defect of the Learned Assessing Officer while deciding another Appeal of the Appellant. There is no independent exercise of judicial mind of the Assessing Officer and the Learned Commissioner has also confirmed the said action, therefore both the orders are glaring examples of non-application of mind and liable to be quashed on this ground only. B. There is no fresh materials available before the Lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to take steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings when intimation under section 143(1) has been issued. Further, placing reliance on the order of ITAT Delhi Bench 'A' in the case of Hanemp Properties Pvt. Ltd. vs. ACIT (2006) 101 ITD 19 (Delhi), ld. CIT DR submitted that in a case provisions of section 150 were attracted, no limitation of time is applied as provided under section 149 of the Act. Ld. CIT DR also referred to the decision of Hon'ble Supreme Court in the case of DCIT Vs. Zuari Estate Development Investment Co. Ltd., 373 ITR 661 (SC). 8. The main bone of contention of ld. CIT DR supporting the initiation of reassessment proceedings u/s. 147 of the Act and issuance of notice u/s. 148 of the Act are precisely as under: i) In a case where assessment has not been made u/s. 143(3) of the Act and only an intimation u/s. 143(1)(a) of the Act has been issued, then the AO will not render powerless to initiate reassessment proceedings. ii) In a case where proceedings u/s. 150 of the Act are attracted, no limitation period (for initiation of reassessment proceedings u/s. 147 of the Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, same is not sustainable and deserves to be quashed. 10. As agreed by both the sides, no copy of satisfaction note is available on record nor in the respective files of the ld. representative of parties. Both the sides have agreed that the AO at page 3 of the assessment order dated 29.12.2006 has reproduced the satisfaction note, which reads as follows: The assessee company filed its return of income alongwith audited account disclosing total income of ₹ 4,54,680/-. The return was processed u/s. 143(1)(a) of the I.T. Act, 1961. While processing the return, it was found that the assessee has not computed its total income as per provisions of section 115JB of the I.T. Act, 1961 and paid taxes accordingly. Therefore, prima facie, adjustment of ₹ 48,53,607/- was made U/S. 115JB of the Act and charged tax accordingly. Being aggrieved with this adjustment, the assessee preferred appeal before the CIT(A). While disposing off the appeal, the Learned CIT(A) although deleted the prima-facie adjustment due to procedural mistake appreciated the escapement of income and loss of revenue and observed that However, the suitable course of action available to the assessee un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) is concerned, definitely, the Hon'ble Supreme Court has clearly rendered the proposition that in a case where after processing the return of income, an intimation u/s. 143(1)(a) has been issued by the department then also, the AO is debarred or precluded to initiate proceedings u/s. 147 of the Act but Hon'ble Supreme Court also provided a condition that he must have reason to believe within the meaning of section 147 of the Act based on new tangible material which was not before the AO during processing of return of income u/s. 143(1)(a) of the Act, otherwise, there will be a review in guise of reopening. In the subsequent judgement, Hon'ble Supreme Court in the case of Kelvinator of India Ltd. (supra), the Hon'ble Supreme Court has categorically held that after 1.4.1989, the AO has power to reopen the assessment provided there is 'tangible material' to come to the conclusion that there is escapement of income. At the cost of repetition, we may also point out that the Hon'ble Supreme Court in the case of Kelvinator India Ltd. (supra) also directs that there can be no review of an assessment in the guise of reopening and a bare review without any tangi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due to procedural mistake and thereafter reproduced the observation of the ld. CIT(A). In the second para of the reasons, he directly jumped to note that the AO had reasons to believe that income chargeable to tax in this case escaped assessment within the meaning of section 147 of the Act. From the reasons, we are unable to see application of mind by the AO of the materials available before him. The AO has not recorded any basis or factum gathered by him after application of mind of the assessment already completed which could reflect that before initiation of reassessment proceedings u/s. 147 of the Act, he applied his mind and thereafter reached to a conclusion that he had reasons to believe that income chargeable to tax has escaped assessment within the meaning of section 147 of the Act empowering him to issue notice u/s. 148 of the Act. Therefore, we have no hesitation to hold that the application of mind and reason to believe are absent in the satisfaction note recorded by the AO before initiation of reassessment proceedings u/s. 147 of the Act and issuance of notice u/s. 148 of the Act. 16. Accordingly, Ground No. A B of the assessee are allowed and the reassessment pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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