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TMI Blog2024 (4) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... older whether any such depreciation has been claimed by the assessee or not. It clearly reflects that the AO has mechanically recorded the reasons and issued the notice without applying his own mind. Ld. PCIT has also accorded approval u/s 151 of the Act based on the reasons recorded by the AO without ascertaining the actual facts of the case. Hon ble Bombay High Court in case of Sharvah Multitrade Compant P Ltd. [ 2022 (1) TMI 372 - BOMBAY HIGH COURT] dealt with similar case and held that reassessment initiated based on reasons recorded on irrelevant facts and without application of mind cannot survive. This, in our considered opinion, it is against the settled principles of law, as reopening of an assessment is an extraordinary power available to the ld AO and it should not be done in a cavalier manner. That is why the legislature in its wisdom had put lot of restrictions by imposing conditions for seeking approval and sanction from a superior officer in terms of section 151 of the Act. AO recorded wrong facts on many count in the reasons recorded for reopening of the assessment i.e. AO recorded incorrect fact that assessee has claimed huge amortization expenses on goodwill and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of hearing assessee filed following Specific grounds in furtherance to ground one above: - 1. That the Commissioner of Income-tax (Appeals) ['CIT(A)'] erred on facts and in law in upholding the validity of reassessment order dated 31.03.2022 passed by the assessing officer under section 147 of the Income-tax Act, 1961 ('the Act): 1.1 That the CIT(A) erred on facts and in law in not appreciating that the reassessment order dated 31.03.2022 passed by the assessing officer is illegal and bad in law, being barred by limitation in terms of proviso to section 147 of the Act. 1.2 That the CIT(A) erred on facts and in law in upholding validity of reassessment proceedings, despite the same having been initiated on the basis of mere change of opinion, without any new tangible material to the possession of the assessing officer subsequent to completion of assessment under section 143(3) r.w.s. 153C of the Act. 1.3 That the CIT(A) erred on facts and in law in not testing/examining the validity of the reopening strictly on the basis of the reasons recorded, and instead, referring to/relying upon finding not mentioned therein. 1.4 That the CIT(A) erred on facts and in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, it is apparent that the assessee has earned an income to the tune of Rs. 6,85,05,730/- during the relevant previous year. Since the assessee has not included this amount in the income while filing return of income for AY 2014-15, this income has escaped assessment. 4. In this case return of income was filed by the assessee for the year under consideration. However, in this case no assessment was made and the only requirement to initiate proceedings u/s. 147 is to record reason to believe that income chargeable to tax has escaped assessment. 5. In view of the above, the provisions of clause (b) of Explanation 2 to Section 147 are applicable to facts of this case and it is deemed to be a case where income chargeable to tax has escaped assessment. 6. In view of the above, I have reason to believe that income amounting to Rs. 6,85,05,730/- chargeable to tax has escaped assessment by reason of failure on the part of the assessee to disclose fully and truly all material facts within the meaning of section 147 of the Income-tax Act, 1961 for the A.Y. 2014-15. Hence, it is a fit case for issue of notice u/s. 148 of the I.T. Act, 1961." 4. Before us the Ld Counsel for the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in case of Jet Airways (331 ITR 234)(Bombay). In this case the Hon'ble High Court held that if no addition made on the issue which was recorded in the reasons for reopening, in that case AO cannot make any other additions. 5. On the other hand, Ld DR supported the order of Ld CIT (A) on this ground and stated that Ld CIT(A) has dealt with all these issues in the order on page 10-13 in details and considering decision of various courts he held that reopening in valid. 6. We have considered the contention of both parties and perused the relevant finding given in the impugned orders and material referred to before us. The only legal ground involved in this Appeal is, whether the reassessment proceedings u/s. 148 of the IT. Act are illegal and without jurisdiction in the absence of any relevant reasons being recorded in respect of any undisclosed income and recording of requisite satisfaction in respect of any such undisclosed income or not. It is an undisputed fact that in the reasons AO has recorded the escapement of income on account of amortization of goodwill which was not claimed by the assessee in computation of normal provisions of the Act and with regard to adjustment i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment. Considering the facts and circumstances of the case, in the light of the above discussion, and decisions referred to in the order, we are of the view that reopening of the assessment is invalid and bad in law and that sanction/approval granted is also without any application of mind. Therefore, the reopening of the assessment cannot be sustained in law. We, accordingly, allow appeal of the assessee on legal grounds. Since appeal is allowed on legal ground of reopening, other grounds in the assessee appeal as well as department appeal on merits of the case, become academic hence does not require any adjudication. ITA No.3468-3466/Mum/2023 AY 2015-16 to 2017-18 (Assessee appeal) 8. The issue on legal ground to challenge reopening is common in all these three year before us accordingly. Since the issue is similar to one as decided by us in ground No.1 in ITA No.3469/Mum/2023 of assessee's appeal, therefore, our decision/finding in the above ground would mutatis mutandis apply to ground No.1 of assessee appeal. Accordingly, ground No.1 of assessee is allowed. ITA No.3594,3593, 3591 & 3589/Mum/2023 AY 2014-15 to 2017-18 (Revenue appeal) 9. The issue involve in rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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