The Calcutta High court has on Friday, while allowing appeal filed before it, held that there cannot be a reopening of assessment based on the audit party’s legal interpretation.
The above said observation was made by the court when an appeal by the assesse, was filed before it as per the provisions of Section 260A of the Income Tax Act, 1961, against an order passed by the Income Tax Appellate Tribunal, `B’ Bench in ITA No.548/Kol/2003, for the assessment year 1994-95.
The substantial question of law involved in the appeal being the correctness of the tribunal’s finding in initiating the reassessment proceedings, altering the Assessing Officer’s relief granted under Section 80HHC of the Act, and further the legality in its jurisdictional limits in doing the same, the High Court relying upon the Apex Court decision in Commissioner of Income Tax vs. Kelvinator of India Ltd, and subsequently allowing the assessee’s appeal thus observed:
“We find that the learned Tribunal has written an elaborate order. However, we are surprised to find that the learned Tribunal has held that the assesse suppressed the material facts which was never the allegation in the reasons recorded for reopening. It is not clear as to on what basis the learned Tribunal came to such a conclusion.
In fact, the learned Tribunal has accepted the legal position that the assessment cannot be done on a mere change of opinion. However, it sought to justify the reassessment order on the ground that the certificate furnished by the Chartered Accountant, the figure of loss was not shown, though the figure of the sale proceeds of the trading goods and the direct and indirect costs were shown. That apart, we find that the finding of the learned Tribunal that the assessing officer had no occasion to or did not examine the claim for deduction under Section 80HHC of the Act is thoroughly flawed and equally is the finding of the learned Tribunal that there was suppression of facts made by the assesse.
Thus, we find that the learned Tribunal erroneously reversed the order passed by the CIT(A) who has considered the facts and circumstances and rightly applied the legal position. In the result, we find that the order of the learned Tribunal calls for interference.
Accordingly, the appeal filed by the assesse is allowed and consequently, the substantial questions of law are answered in favour of the assesse.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates.
