Case Law Details
The case of assessee was reopened and the assessment under section 144 read with section 147 of the IT Act, 1961. While framing the assessment, the AO restricted the deduction claimed u/s 80P(2)(c)(i) of the Act and also confirmed the disallowance u/s 40(a)(ia) consequent to deposit of TDS after due date of filing of return for the AY 2009-10. Appellant challenged the reopening of the case on the ground that reopening of a case assessed u/s 143(3) within 4 years requires the sanction of Additional Commissioner u/s 151 instead of sanction accorded by CIT.
Such reopening been further challenged on the ground that CAG auditor’s interpretation of Section 80P can not be treated as information for reopening by the AO. Hon’ble Bench rejected the first contention and held that according the sanction to reopening by higher authority i.e. CIT in place of lower authority i.e. JCIT is in accordance with the law as the post-approval of JCIT was on record. However, the objection raised by the auditor is with regard to the rate of entitlement of deduction under section 80P(2)(c)(i) which is necessarily an issue of application or interpretation of law. Therefore, the ratio laid down by the Hon’ble Supreme Court in the case of CIT vs. Lucas TVS Ltd. (2001) 117 Taxman 366 (SC) is squarely applicable, wherein the Hon’ble Apex Court held that an auditor’s opinion in regard to application or interpretation of law can not be treated as information by the AO as information for re-opening of assessment.
