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TMI Blog2025 (4) TMI 1033X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 147 r.w.s.144B of the Act on 26-03-2022. 1.2 The grounds raised by the Revenue read as under:- 1. The order of the learned CIT(A) is contrary to law, f acts and circumstances of the case. 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was right in holding that the reopening was bad as the AO had reopened the case despite not accepting the audit objection, when the very fact that the AO has initiated remedial action to the audit objection with the prior approval of the Pr. CIT-1, Chennai goes to prove that the Assessing Officer has accepted the Audit objection on merits? 3. The Ld. CIT(A) while deciding the appeal of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on various case laws. The Ld. Sr. DR also advanced arguments and supported the assessment order. Having heard rival submissions and upon perusal of case records, our adjudication would be as under. Assessment Proceedings 2.1 The assessee being resident company filed regular return of income admitting income of Rs.7.82 Lacs. The same was taken up for limited scrutiny and an assessment was framed u/s 143(3) on 27-09- 2019 accepting the returned income. 2.2 Subsequently, the case was reopened and a notice u/s 148 was issued within 3 years i.e., on 22-03-2021. The assessee admitted the same income. The reasons for reopening were communicated to the assessee. The assessee preferred objection against the same which was rejected by Ld. AO o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmissions which have already been extracted in the impugned order. 3.2 The Ld. CIT(A), in para-8, noted that the case was reopened on the basis of audit objection without there being any fresh tangible material. Upon perusal of Audit Memo dated 21-10-2020, Ld. AO mentioned that the observation memo was beyond the scope of assessment and the observation made in the audit memo was to be dropped. The Ld. AO disagreed with the audit objection but despite disagreeing with the audit objection, Ld. AO reopened the case on the basis of same very material which was available at the time of original assessment proceedings. No fresh material was there on record and reasons related to the same set of facts / material that was available at the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sal of reasons recorded by Ld. AO to reopen the case of the assessee, it could very well be seen that formation of belief of escapement of income is on same set of material and financial documents which were already available before Ld. AO during the course of original assessment proceedings. The reasons do not indicate any event as to the receipt of any fresh tangible material coming to the possession of Ld. AO subsequent to culmination of original assessment proceedings. The formation of belief is on the same set of material as available during assessment proceedings u/s 143(3). This being the case, reopening would be nothing but mere change of opinion on existing material which is impermissible as per the decision of Hon'ble Apex Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince Ld. AO did not have valid jurisdiction to reopen the case of the assessee. 5. We also find that pertinently the assessment was reopened to make addition u/s 68 but ultimately Ld. AO has made no such addition and he has ended up making addition u/s 28(ii). In such a case, the ratio of decision of Hon'ble Bombay High Court in the case of CIT vs. Jet Airways (I) Ltd. (195 Taxman 117) would also apply. In this decision, it was held by Hon'ble Court that Explanation-3 could not override the necessity of fulfilling the conditions set out in the substantive part of Sec.147. An Explanation to a statutory provision is intended to explain its contents and cannot be construed to override it or render the substance and core nugatory. Section 147 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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