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30-10-2019, Tenughat Emta Coal Mines, Section 147, 148, Tribunal Ranchi

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1 week 12 hours ago #11317 by amit
Section - 147, 148, 3, 4, 14
Order Date - 30-10.2019
Favouring - Assessee
Court - Tribunal Ranchi
Appellant - Tenughat Emta Coal Mines Ltd.
Respondent - ITO
Justice - CHANDRA MOHAN GARG JM & LAXMI PRASAD SAHU AM
Citation - 1119Taxpundit54
Appeal No. - ITA Nos.56,57 & 58/Ran/2015
Asstt. Year - 2007-08 to 2009-2010

Order

PER : CHANDRA MOHAN GARG

The above captioned appeals have been filed by the assessee against the separate orders of the Commissioner of Income Tax(Appeals)- Ranchi dated 21.1.2015 for the assessment years 2007-08 to 2009-2010.

2. Ld representative of both parties have agreed that the facts and circumstances of the appeals for the assessment year 2007-08 to 2009- 2010 are identical and similar. Therefore, for the sake of convenience and clarity, for our adjudication, we are taking up the appeal in ITA No.56/Ran/2015 for assessment year 2007-08 as a lead case to decide the controversy.

3. Ground No.1 for the assessment years 2007-08 to 2009-2010 is general in nature and hence, requires no separate adjudication.

4. Ground Nos.2 to 2.2 of appeal for the assessment year 2007- 08, the assessee has raised legal ground, which read as follows:

“2. That the CIT(A) failed to appreciate the contention of the appellant in regard to wrong assumption of jurisdiction u/s.147/148 of the Act by the AO in order to make addition of interest earned on FDRs as appellant’s income for the year under consideration.

2.1 That the CIT(A) failed to appreciate that the AO had no reason to believe that income escaped assessment within the meaning of section 147/148 of the Act and that the reopening was bad in law.

2.2 That the CIT(A) failed to appreciate the fact that the reasons to believe did not ex st and the AO had reopened the assessment as achange of opinion which is not permissible in law for reopening of the assessment.”

5. Apropos this ground, ld A.R. of the assessee submitted that the CIT(A) failed to appreciate that the AO did not assume valid jurisdiction u/s.147/148 of the Act for initiation of reassessment proceedings and issuing notice u/s.148 of the Act. Ld A.R. drew our attention towards Annexure-4 i.e. reasons recorded by the AO for initiating reassessment proceedings vide dated 14.2.2011 and submitted that there was no new tangible materials in the hands of the AO at the time of initiating reassessment proceedings and thus, it is clear case of change of opinion, which were before the AO at the time of original assessment proceedings. Ld counsel vehemently pointed out that from the reasons, it is ample clear that the AO had no reason to believe that income has escaped assessment as there is no reason or description or basis on which the AO formed an opinion to believe that income has escaped assessment in the assessment year 2007-08. Placing reliance on the decision of CIT v. Kelvinator of India Ltd.: 320 ITR 561(SC), ld A.R. contended that as there was no tangible materials in the hands of the AO for reopening the assessment, the impugned assessment as well as the first appellate order deserves to be quashed.

6. Replying to above, ld Sr. DR strongly opposed to the legal ground of the assessee and submitted that the assessee earned interest income from the fixed deposits from the bank and did not disclose the same as income of the assessee. Therefore, the AO had reason to believe that interest income has escaped assessment.

7. On careful consideration of the rival submissions, first of all, we find it appropriate to reproduce the reasons recorded by the AO dated 14.2.2011 while initiating reassessment proceedings u/s.147 of the Act and issuing notice u/s.148 of the Act as under:

“ In this case, scrutiny assessment was done for A.Y. 2008- 09 during which it was noted that the assessee is earning interest income from fixed deposit and, therefore, I have reason to believe that income earned interest on fixed deposit has escaped assessment and, therefore, notice u/s.148 is being issued and served on the assessee in this regard.”

8. From the above reasons, it is clearly discernible that the AO proceeded to initiate reassessment proceedings for assessment year 2007-08 on the basis of scrutiny assessment proceedings done by him for the assessment year 2008-09 during which it was noted that the assessee is earning interest income from fixed deposits and the same was not shown as income from other sources. Therefore, in our humble understanding, there was new material before the AO, which was not before him during original assessment proceedings for the assessment year 2007-08 and found in the assessment record for the assessment year 2008-09. Therefore, in our opinion, it is not a case of change of opinion. So far as reason to believe is concerned, when the AO had made addition for the assessment year 2008-09 pertaining to interest income earned by the assessee from fixed deposits on the basis of financial statement of the assessee for the assessment year 2008- 09, then on perusal of assessment record for assessment year 2007-08, the AO had reason to believe that similar income of interest earned by the assessee from the fixed deposits has escaped assessment for assessment year 2007-08. In view of above, without expressing any opinion on the merits of the

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