CIT Vs India Cements Ltd. (Madras High Court)
Madras High Court held that assessee can raise additional ground of validity of reassessment proceedings in terms of rule 27 of the ITAT Rules. Accordingly, ITAT justified in accepting the ground that reassessment was change of opinion.
Facts- AO issued independent notices u/s. 148 of the Income Tax Act, for reopening the assessment on the ground that the book profit offered by the assessee differed from the book profit prepared for the Annual General Meeting and hence certain income had escaped assessment. AO made certain additions inter alia under the heads “Cessation of Sales Tax Liability”; “Book Profit under Section 115JA”; and “Expenses for product brand launching in the form of special discounts/expenses for promoting new brand of Cements” and increased the tax liability of the assessee.
CIT(A) partly allowed the appeal. ITAT dismissed the appeal of the revenue and held that the reassessment was invalid as it was only a change of opinion. Being aggrieved, the present writ is filed.
Conclusion- Held that in this case, as submitted earlier, the respondent/assessee had raised the ground with regard to the validity of the reassessment before the CIT(A). The assessee had filed a written application before the ITAT under Rule 27 of the ITAT Rules, seeking to sustain the order passed by the CIT(A) also on the validity of reassessment. The ITAT was justified in the facts and circumstances in accepting the ground raised by the assessee that the reassessment was only a change of opinion and hence unsustainable in law.
