Case Law Details
PCIT Vs SKI Retail Capital Ltd. (Madras High Court)
Conclusion: AO was not justified in reopening of assessment after four years as on an independent application of mind and on thorough consideration of material aspects and legal position,there was no failure on the part of assessee.
Held: AO reopened case under Section 147 by the issuance of notice under section 148 and in response to the same, assessee had sent a letter stating that the return of Income already filed by him be treated as Return filed by him in compliance with Notice. AO after considering and scrutinizing the materials, had treated the credit balance as deemed dividend in the hands of assessee-company and completed the scrutiny assessment. Assessee contended that the notice under Section 148 was issued after 4 years from the Assessment Order despite the fact that there was no failure on the part of assessee to furnish truly and fully all material facts necessary for assessment. It also took a stand that reopening of the assessment was purely on account of audit objections for which AO himself sent a reply that there was no justification for raising objections and the assessment could be reopened only if AO was in possession of tangible materials/facts on the basis of which, he had reason to believe that income had escaped assessment. It was held that the reasons recorded in the notice as to the income escaping assessment and the order of assessment passed under Section 143(3) r/w. Section 147 were unsustainable on facts as well on law. The findings recorded by ITAT, in the impugned common order as to the non-application of mind on the part of AO to apply his mind independently for the purpose of reopening of assessment was also sustainable for the reason that the very same official in response to the audit objection dated 31.01.2015, had taken into consideration all the materials placed and requested for dropping of the audit objection and therefore, passing of second order of assessment dated 31.03.2015 by him amounted to change of opinion on the very same set of facts. Thus, on an independent application of mind and on thorough consideration of material aspects and legal position, there was no error or infirmity in the reasons assigned by the ITAT in dismissing the appeal filed by the Revenue.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
The Tax Case Appeals are preferred against the common order dated 10.08.2017 made in ITA. No. 2276/Mds/2016 and C.O.No.129/Mds/2016 pertains to the Assessment Year 2007-2008, by the Revenue.
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