Jain Textile Industries Vs ACIT (ITAT Delhi)
Delhi ITAT dismissed Assessee’s appeal, holding that reopening u/s 147 was valid as the issues of interest income & capitalisation of accessories were never examined in the original assessment & hence it was not a case of “change of opinion”.
Assessee, a textile processor engaged in dyeing & printing, had filed its return declaring Nil income which was initially assessed u/s 143(3). Later, AO reopened the case u/s 147 after noticing that interest income of ₹5.17 lakh was omitted & ₹1.27 crore spent on accessories for boilers & machinery was claimed as revenue expense instead of capital. Assessee objected that reopening was based on borrowed satisfaction without new tangible material & amounted to change of opinion since scrutiny had already been completed earlier.
Tribunal noted that AO had specifically recorded that these aspects were never examined in the original proceedings, & Explanation 1 to section 147 empowered reopening even if facts were embedded in records but not truly disclosed. Hence, reopening after four years was justified.
On Assessee’s plea against CIT(A)’s remand order, Tribunal found that due to non-compliance in assessment caused by illness, CIT(A) rightly remitted the issue back to AO u/s 251(1)(a) for fresh adjudication. Since the addition on ₹1.27 crore was already remanded, Tribunal found no reason to interfere.
