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TMI Blog2021 (10) TMI 1266X X X X Extracts X X X X X X X X Extracts X X X X ..... al Audit party of the Income Tax Department cannot be recorded as information within the meaning of section 147(b) of the Act for the purpose of opening the assessment. The courts have also held that notice of reassessment cannot be issued based on information received from audit objection. No substantial question of law. - INCOME TAX APPEAL NO.1879 OF 2017 - - - Dated:- 26-10-2021 - K. R. SHRIRAM AND AMIT B. BORKAR, JJ. Mr. Suresh Kumar for the Appellant. Mr. Madhur Agrawal i/b Mr. Atul K. Jasani for the Respondent. P. C. : Order under Section 143(3) of the Income Tax Act 1961 (for short, IT Act) was passed on 15/11/20210 determining the assessee s income of ₹ 3,37,70,08,315/- after disallowance of provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw, the Hon'ble ITAT was justified in annulling the reopening of the assessment under Section 147 of the Act without appreciating the fact that after substitution of the section 147 by direct tax laws (amendment) act 1987, w.e. 1/4/1989 the assessing officer has power to reopen the assessment if there is tangible material to come to conclusion that there is an escapement of income from assessment and that the reasons recorded has a link with the formation of belief ? b) Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT was justified in annulling the reopening of the assessment under Section 147 of the Act merely by giving undue importance to the trivial issue of preliminary reply sent to the audit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he audit objection and had even addressed a letter to the Director of Audit intimating that objections raised by audit authority were not acceptable. Nevertheless the Assessing Officer reopened and issued notice under Section 148 of the Act. 4. It is settled law that the opinion of the Internal Audit party of the Income Tax Department cannot be recorded as information within the meaning of section 147(b) of the Act for the purpose of opening the assessment. The courts have also held that notice of reassessment cannot be issued based on information received from audit objection. The Apex Court in Indian Eastern Newspaper Society vs. Commissioner of Income Tax (1979) 2 Taxman 197 (SC) in paragraph 20 has held as under:- 20. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the law in its bearing on the assessment must be made directly and solely by the Income Tax Officer. Considering this proposition of law, ITAT came to the conclusion that reopening of assessment was not correct and allowed the appeal filed by respondent. 7. We have no reason to take a different view from the view expressed by our own High Court. In our view, ITAT has not committed any perversity or applied incorrect principles to the given facts and when the facts and circumstances are properly analysed and correct test is applied to decide the issue at hand, then, we do not think that question as pressed raised any substantial question of law. 8. Appeal is devoid of merit and is dismissed with no order as to costs. - - TaxTM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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