Income Tax, Issue Update

Issue examined under original assessment proceeding: Whether re-opening in such case is justified

Case: Addl. CIT vs. Shiv Offset India Pvt Ltd, Indore ITAT

This case delves on the issue whether is is justified on the part of assessing officer to re-open the issue and re-examine the same even if examined during original assessment proceedings?

Reliance was placed on the decision of the Hon’ble Supreme Court in the case of CIT vs. Kelvinator of India Ltd., wherein it was concluded that in the absence of fresh information/ material coming to the possession of the Assessing Officer, reopening was not permissible. Hence, it was inferred that the re-assessment proceedings were liable to be quashed. See Facts & Key Points.

A similar issue to this docket would be ‘Reopening of assessment on the basis of audit objection: Validity under section 147‘.

If you are a tax professional who advises individuals or companies on aspects of depreciation and assessment procedures, you may like to track such cases using our Telescope dashboard.

Facts

  • The return of income was filed by the Asssessee declaring Rs.56.02 lakhs after setting off the brought forward loss of Rs. 6.78 lakhs. The case selected for scrutiny and the assessment completed under section 143(3) of the Act by assessing an amount of Rs.66.81 lakhs against the return income of Rs.56.02 lakhs disallowing the claim of unabsorbed depreciation at the rate of 40% instead of 15% on the ground that higher rate of depreciation was claimed by the Assessee because the company was engaged in the offset printing business. Accordingly a notice under section 148 was issued to the Assessee.

Key points

  • Reliance was placed on the decision of the Hon’ble Supreme Court in the case of CIT vs. Kelvinator of India Ltd., wherein it was concluded that in the absence of fresh information/ material coming to the possession of the Assessing Officer, reopening was not permissible. Hence, it was inferred that the re-assessment proceedings were liable to be quashed.

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