The Chennai bench of the Income Tax Appellate Tribunal ( ITAT ) delivered a setback to Titan and upheld the legality of reopening the assessment under Section 147 of the Income Tax Act, 1961.
In this case, the assessing officer ( AO ) reopened the assessment under Section 147 due to the omission of a Rs. 2.12 crore prior-year loss while computing a Rs. 3.72 crore deduction under Section 80IC of the Income Tax Act for assessing officer ( AY ) 2011-12 and a wrongful bad debts claim of Rs. 29.52 crore.
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Although the assessee appealed before the Commissioner of Income Tax ( Appeals ) [ CIT ( A ) ], there were no favourable results and it was held that the reopening was valid according to law.
The assessee’s counsel contended that the appellant’s reopening was done in view of a fact that was already on record with the AO, and thus the same was not valid. It was further contended that the reopening implied a clear case of change of opinion.
After listening to both sides, ITAT observed that the CIT(A) had extensively analysed the issue by addressing grounds like reopening based on existing facts, change of opinion, and the applicability of the first proviso to Section 147.
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ITAT noted that the CIT(A) comprehensively analysed the issue and upheld the Section 147 proceedings based on a correct understanding of the facts and relevant law by relying on the ITAT Mumbai’s decision in Hercules Hoist Ltd. ( 35 Taxman.com 592 ) on similar facts.
The bench, comprising of SS Viswanethra Ravi ( Judicial Member ) and Amitabh Shukla ( Accountant Member ) upheld the decision of CIT( A ) and dismissed the ground raised by teh assessee challenging the legality of reopening assessment under Section 147 of the Income Tax Act.
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