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TMI Blog2023 (3) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... issue and, where, the audit party has quantified escapement, then, definitely, it does not constitute information for reopening of assessment. In this case, if we go by audit note issued by the audit party, it points out disallowance of 40(a)(ia) of the Act for non-deduction of TDS, in our opinion, the said observations of the audit party is on a factual matrix and no legal position is involved. Therefore, the argument of the ld. DR in light of certain judicial precedents are not tenable. - I.T.A. No.722/Chny/2020 I.T.A. No.619/Chny/2020 - - - Dated:- 22-2-2023 - Shri V. Durga Rao , Judicial Member And Shri G. Manjunatha , Accountant Member For the Department : Shri AR V Sreenivasan, Addl. CIT For the Assessee : Shri S. Sridhar, Advocate Shri N. Arjunraj, CA ORDER PER V. DURGA RAO , JUDICIAL MEMBER : Both the cross appeals filed by the Revenue as well as assessee are directed against the order of the ld. Commissioner of Income Tax (Appeals) 1, Trichy, dated 19.03.2020 relevant to the assessment year 2014-15. 2. Both the appeals filed by the Revenue and the assessee are delayed by 28 days and 18 days respectively in filing the appeal due to outbr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of non deduction of TDS within the meaning of Clause (c)(iii) of the explanation 2 to Sec. 147 of Income tax Act. Hence, it is requested that the JCIT may accord necessary approval to initiate the proceedings to reopen assessment u/s. 147 of the Income-tax Act. 5. After reopening of assessment, the Assessing Officer has observed that the assessee has made payment of hire charges to the tune of ₹.14,78,95,505/- without deducting TDS. Hence, as per section 194C of the Act, 30% of ₹.14,78,95,505/- i.e., ₹.4,43,68,652/- was disallowed under section 40(a)(ia) of the Act and added to the total income of the assessee. Accordingly, the assessment was completed under section 143(3) r.w.s. 147 of the Act dated 30.12.2019. The assessee filed an appeal before the ld. CIT(A) questioning the validity of reopening of assessment under section 147 of the Act. The ld. CIT(A) quashed the reopening of the assessment. 6. Aggrieved, the Revenue carried the matter in appeal before the Tribunal. The ld. DR has submitted that the Assessing Officer, at the time of assessment under section 143(3) of the Act has not examined the application of TDS provisions and therefore, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of change of opinion, which is not permissible under law as per the judgement of the Hon ble Supreme Court in the case of CIT v. Kelvinator India Limited 320 ITR 561 (SC). 8.1 In similar circumstances, the Hon ble Madras High Court in the case of TANMAC India v. DCIT [2017] 78 Taxmann.com 155 (Madras) [TCA No. 1426 of 2007] has considered an identical issue and by following the decision of the Hon ble Supreme Court in the case of CIT v. Kelvinator India Ltd. (supra), the Hon ble Jurisdictional High Court has held that what is sought to be done by the re-assessment, ought to have been achieved by scrutiny assessment proceedings. Having not done so, the Department cannot be permitted to avail of the extended time limit in the absence of any new or tangible material . The relevant portions of the judgement of the Hon ble Madras High Court are reproduced as under: 10. Let us now see the sequence of events that have transpired in this case. The Assessee filed a return of income pursuant to which, an intimation dated 01.12.1998 under section 143(1) (a) of the Act was issued. The provisions of Section 143(2) require that if the Assessing Officer considered it necessary or expedie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be apparent that the exercise undertaken by the Revenue in this case is not one of the re-assessment, but of review. The reasons make it abundantly clearly that the reassessment is sought to be initiated on the basis of the return of income and the enclosures which were available with the Assessing Officer since 02.11.2018 and0 which ought to have prompted him to issue a notice under section 143(2) of the Act to conduct the proceedings under scrutiny. What is sought to be done by the re-assessment ought to have been achieved by scrutiny assessment proceedings. Having missed the bus earlier, the Department cannot be permitted to avail of the extended time limit in the absence of any new or tangible material, when the time for scrutiny assessment has elapsed on 31.03.2001, prior to issue of notice u/s.148. The notice under section 148 dated 09.12.2002 is thus an arbitrary exercise of power and a review of proceedings impermissible in law. 8.2 In the present case also, when there was no fresh material available with the Assessing Officer for harbouring a doubt that income had escaped assessment, the reopening of assessment was purely based on change of opinion. Considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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