ACIT, Cir-16(1), Hyderabad V. M/s. Neuland Laboratories Limited, Hyderabad

ITA 1350/HYD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82564 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 20-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: M V ANIL KUMAR; A V SADASIVA
• Keywords: Reopening of assessment; Invalid notice; Tangible material; Bad and doubtful debts; Difference of opinion; Reason to believe; Change of opinion
• Section: 143(3); 80HHC; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 1350/HYD/2011 ASSESSMENT YEAR : 2004-05 DY. COMMISSIONER OF INCOME- TAX, CIRCLE 16(1), HYDERABAD NEULAND LABORATORIES LTD., HYDERABAD. PAN AAACN9531 (APPELLANT) (RESPONDENT) REVENUE BY SHRI RAJAT MITRA ASSESSEE BY SHRI A.V. SADASIVA & M.V. ANIL KUMAR DATE OF HEARING 10-11-2014 DATE OF PRONOUNCEMENT 19-11-2014 O R D E R PER SAKTIJIT DEY, J.M.: THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST ORDER DATED 03/05/11 PASSED BY THE COMMISSIONER OF INCOME-TAX( A)-V, HYDERABAD, FOR THE ASSESSMENT YEAR 2004-05. THE DE PARTMENT IS AGGRIEVED WITH THE DECISION OF LEARNED CIT(A) IN HO LDING THE ASSESSMENT ORDER PASSED U/S 147 OF THE ACT TO BE IN VALID. 2. BRIEFLY THE FACTS ARE, ASSESSEE A COMPANY IS ENG AGED IN THE BUSINESS OF MANUFACTURE AND TRADING OF BULK DRUGS A ND INTERMEDIATES. FOR THE AY UNDER CONSIDERATION, ASSESSEE FILED ITS RETURN OF INCOME ON 28/10/2014 DECLARING NIL INCOME AFTER SET OFF OF BROUGHT FORWARD LOSSES OF RS. 2,66,08,771. ASSESSMENT IN CASE OF AS SESSEE WAS COMPLETED U/S 143(3) OF THE ACT, ORIGINALLY, VIDE O RDER DATED 29/12/2006 DETERMINING TAXABLE INCOME AT NIL AFTE R MAKING 2 ITA NO 1350/HYD/2011 NEULAND LABORATORIES LTD. DISALLOWANCE OF CERTAIN EXPENDITURES OF RS. 12,33,3 87 AND RESTRICTING DEDUCTION U/S 80HHC TO RS. 40,19,504 IN PLACE OF RS . 53,73,917 AS CLAIMED BY ASSESSEE. SUBSEQUENTLY, ASSESSMENT IN CA SE OF ASSESSEE WAS REOPENED BY ISSUANCE OF NOTICE U/S 148 DATED 31 /03/2009. IN PURSUANCE TO THE NOTICE ISSUED U/S 148, ASSESSEE TH OUGH FILED RETURN OF INCOME DECLARING INCOME AS DISCLOSED IN THE ORIG INAL RETURN, BUT, AT THE SAME TIME, ASSESSEE RAISED OBJECTION FOR REOPEN ING OF ASSESSMENT. AO, HOWEVER, NOTED THAT ASSESSEE HAS CL AIMED DEDUCTION OF RS. 973.80 LAKHS IN THE P&L ACCOUNT FO R THE YEAR ENDED 31/03/06 UNDER THE HEAD PRIOR PERIOD AND EXCEPTION AL ITEMS. AO WAS OF THE VIEW THAT AS THE EXPENDITURE SO CLAIMED, DO NOT RELATE TO THE CURRENT AY, THEY ARE NOT DEDUCTIBLE FROM THE INCOME OF THE ASSESSMENT YEAR UNDER DISPUTE. ACCORDINGLY, AO COMP LETED ASSESSMENT U/S 143(3) READ WITH SECTION 147 VIDE OR DER DATED 30/12/2010 BY DISALLOWING PRIOR PERIOD EXPENDITURE OF RS. 20,03,39,000, AS A RESULT OF WHICH TOTAL INCOME WAS DETERMINED AT RS. 6,38,77,991. BEING AGGRIEVED OF THE ASSESSMENT ORDE R SO PASSED, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A). 3. IN COURSE OF HEARING OF APPEAL BEFORE LD. CIT(A) , ASSESSEE RELYING UPON VARIOUS JUDICIAL PRECEDENTS, SUBMITTED THAT DURING ORIGINAL ASSESSMENT PROCEEDING, ASSESSEE HAS DISCLO SED ALL MATERIAL FACTS RELATING TO THE EXPENDITURE CLAIMED INCLUDING PRIOR PERIOD ITEMS AND AO AFTER CONDUCTING DUE ENQUIRY AND AFTER PROPE R EXAMINATION OF FACTS AND MATERIALS ON RECORD AND APPLYING HIS MIND HAS COMPLETED ASSESSMENT U/S 143(3) OF THE ACT. HENCE, REOPENING OF ASSESSMENT ON THE VERY SAME ISSUE AND REAPPRAISAL OF THE VERY SAME MATERIAL, WHICH WERE CONSIDERED AT THE TIME OF ORIGINAL ASSES SMENT, WILL AMOUNT TO A CHANGE OF OPINION. LD. CIT(A) AFTER CONSIDERIN G THE SUBMISSIONS OF ASSESSEE AND EXAMINING THE FACTS AND MATERIALS O N RECORD FOUND THAT DEDUCTION CLAIMED OF PRIOR PERIOD ITEMS WAS NO T ONLY ENQUIRED INTO BY AO AT THE TIME OF ORIGINAL ASSESSMENT, BUT, ASSESSEE HAS ALSO DISCLOSED FULL PARTICULARS ABOUT THE PRIOR PERIOD A ND EXCEPTIONAL ITEMS 3 ITA NO 1350/HYD/2011 NEULAND LABORATORIES LTD. AND AO AFTER VERIFYING THE INFORMATIONS SUBMITTED B Y ASSESSEE HAS COMPLETED ASSESSMENT. LD. CIT(A) FURTHER NOTED THE FACT THAT THE REASONS RECORDED BY AO FOR REOPENING OF ASSESSMENT CLEARLY DISCLOSED THAT ONLY ON REVIEW OF MATERIALS ALREADY AVAILABLE ON RECORD AND CONSIDERED IN THE ORIGINAL ASSESSMENT, AO HAS R EOPENED THE ASSESSMENT. LD. CIT(A), THEREFORE, FOLLOWING THE DE CISION OF HONBLE SUPREME COURT IN CASE OF CIT VS. KELVINATOR INDIA L TD., 320 ITR 561 AND SOME OTHER DECISIONS OF DIFFERENT HIGH COURTS H ELD THAT REOPENING OF ASSESSMENT IS INVALID AND THE ASSESSMENT ORDER P ASSED IN PURSUANCE TO THAT IS ALSO NULL AND VOID. THE FINDIN G OF THE LEARNED CIT(A) IN THIS REGARD IS EXTRACTED HEREUNDER: 5.7 FROM THE ABOVE FACTS AND CIRCUMSTANCES, I HAVE NO DOUBT THAT THE AO HAS APPLIED HIS MIND AND PASSED THE ORI GINAL ASSESSMENT ORDER BASING ON DETAILED DISCUSSIONS AND FACTS SUBMITTED BY THE APPELLANT. THE SPECIFIC ISSUES RAI SED IN THE NOTICE U/S 148 DATED 31/03/2009 WERE CONSIDERED IN THE EARLIER ASSESSMENT ORDER DATED 29/12/2006. THE ACT OF ISSUA NCE OF NOTICE U/S 148 WAS A MERE CHANGE IN OPINION BASED O N AN OBJECTION RAISED BY REVENUE AUDIT PARTY. THE APPELL ANT HAD OBJECTED TO THE ISSUANCE OF NOTICE UNDER SECTION 14 8 DURING ASSESSMENT PROCEEDINGS AND AO HAD REPLIED TO THESE OBJECTIONS. THEREFORE, KEEPING IN VIEW ALL THE FACT S AND RATIOS OF THE HONBLE COURTS, I HOLD THAT THE ISSUANCE OF NOT ICE U/S 148 WAS NOT IN ORDER. ACCORDINGLY, THE ASSESSMENT BASED ON INVALID NOTICE IS NULL AND VOID. THIS BEING THE CASE, I AM NOT GOING INTO THE MERITS OF THE GROUNDS BECAUSE THE ASSESSMENT IT SELF STANDS ANNULLED. 5.8 SINCE THE REOPENING OF THE ASSESSMENT ITSELF IS BAD IN LAW, THEREFORE, THE REOPENED PROCEEDINGS ARE HELD A B INITIO VOID. THE REASSESSMENT IS LEGALLY INVALID. THE OTHER GROU NDS OF APPEAL ARE THEREFORE NOT BEING ADJUDICATED UPON. 4. THE LEARNED DR SUBMITTED BEFORE US THAT LD. CIT( A) WAS NOT JUSTIFIED IN HOLDING THE ASSESSMENT ORDER TO BE INV ALID ON THE GROUND THAT AO HAS REOPENED ASSESSMENT ON THE BASIS OF AUD IT OBJECTION. HE SUBMITTED THAT REASONS RECORDED CLEARLY SHOW THAT A O AFTER APPLYING HIS MIND HAS FORMED AN OPINION THAT INCOME ASSESSAB LE HAS ESCAPED ASSESSMENT. ACCORDINGLY, REOPENING WAS MADE. HE FUR THER SUBMITTED THAT THE OBJECTION RAISED BY AUDIT PARTY CONSTITUTE S INFORMATION AND AO 4 ITA NO 1350/HYD/2011 NEULAND LABORATORIES LTD. CAN REOPEN THE ASSESSMENT ON THE BASIS OF SUCH INFO RMATION PROVIDED. HE APPLIES HIS MIND INDEPENDENTLY WHILE FORMING BEL IEF THAT THERE IS ESCAPEMENT OF INCOME. IN SUPPORT OF SUCH CONTENTION , LEARNED DR RELIED UPON THE FOLLOWING DECISIONS: 1. CONSOLIDATED PHOTO & FINVEST LGD. VS. ACIT, [200 6] 281 ITR 394 (DEL.) 2. SOM DATT BUILDERS P. LTD. VS. DCIT, [2006]280 ITR 229 (AT). 5. THE LEARNED DR ON THE OTHER HAND STRONGLY SUPPOR TING THE ORDER OF LD. CIT(A) SUBMITTED THAT NOT ONLY ASSESSEE HAS FURNISHED ALL DETAILS REGARDING THE PRIOR PERIOD AND EXCEPTIONAL ITEMS IN THE FINAL ACCOUNTS AS WELL AS RETURN OF INCOME, BUT, AO AT TH E TIME OF ORIGINAL ASSESSMENT HAS MADE NECESSARY ENQUIRY AND EXAMINED ASSESSEES CLAIM WITH REGARD TO PRIOR PERIOD AND EXCEPTIONAL I TEMS. ONLY AFTER APPLYING HIS MIND TO THE FACTS AND MATERIALS, AO HA S COMPLETED ASSESSMENT AND IN FACT DISALLOWED A PART OF THE EXP ENDITURE FROM THE PRIOR PERIOD ITEMS. THEREFORE, AS AO HAS EXAMINED T HE ISSUE RELATING TO PRIOR PERIOD ITEMS, ASSESSMENT CANNOT BE REOPENE D ON THE VERY SAME ISSUE AND MATERIAL WHICH WAS CONSIDERED AT THE TIME OF ORIGINAL ASSESSMENT AS IT WILL AMOUNT TO CHANGE OF OPINION. LD. AR SUBMITTED THAT REASONS RECORDED ITSELF SHOWS THAT ON REVIEW O F EARLIER ASSESSMENT ORDER AND RECORD AO HAS FORMED BELIEF TH AT INCOME HAS ESCAPED ASSESSMENT. LD. AR SUBMITTED THAT LAW IS WE LL SETTLED THAT ORDER PASSED EARLIER CANNOT BE REVIEWED BY RESORTIN G TO SECTION 147. IN SUPPORT OF HIS CONTENTION, LEARNED AR RELIED ON THE FOLLOWING DECISIONS: 1. CIT VS. KELVINATOR INDIA LTD., 320 ITR 561 2. USHA INTERNATIONAL LTD., 348 ITR 485 6. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE ORDERS OF REVENUE AUTHORITIES AS WELL AS OTHER MATERIAL ON RECORD. WE HAVE ALSO CAREFULLY APPLIED OUR MIND TO THE DECI SIONS RELIED UPON BY THE PARTIES BEFORE US. THERE IS NO DISPUTE TO TH E FACT THAT 5 ITA NO 1350/HYD/2011 NEULAND LABORATORIES LTD. ASSESSMENT IN CASE OF ASSESSEE WAS ORIGINALLY COMPL ETED U/S 143(3). OF THE ACT. REASONS RECORDED FOR REOPENING THE ASSE SSMENT U/S 147 ARE AS UNDER: LATER, IT WAS NOTICED THAT THE INCOME HAS ESCAPED ASSESSMENT AND THE CASE IS REOPENED U/S 147 OF THE IT ACT AND NOTICE U/S 148 H AS BEEN ISSUED. ON THE REQUEST OF ASSESSEE-COMPANY VIDE ITS LETTER IN NU/F IN/2009-10 DATED 27/04/2009, THE REASONS FOR REOPENING WERE FURNISHED TO THE ASS ESSEE VIDE THIS OFFICE LETTER NO. DCIT-16(1)/RAP/DP/(SOF)/2004-05 DATED 24/06/2009 WH ICH ARE REPRODUCED AS UNDER: 'THE ASSESSEE FILED RETURN OF INCOME DISCLOSING INC OME OF RS. NIL. THE GROSS INCOME BEFORE CLAIMING DEDUCTION U/S 80HHC WAS RS.3 , 19,82,6881-. THE ASSESSEE CLAIMED DEDUCTION U/S 80HHC OF RS.53,73,91 71- AND ADJUSTMENT AGAINST BROUGHT FORWARD LOSSES OF RS.2,66, 08, 7711-. THE ASSESSMENT U/S 143(3) HAS BEEN COMPLETED ON 29.12.2006 ON A GROSS TOTAL INCOME OF RS.3,32,16,0751- AND AFTER ALLOWING SET O FF OF BROUGHT FORWARD LOSSES OF RS.2,91,96,5711- AND AFTER ALLOWING DEDUCTION U/S 8 0HHC OF RS.40, 19,5041- INCOME HAS BEEN DETERMINED AT NIL. DURING REVIEW, IT IS NOTED THAT THE ASSESSEE HAS CL AIMED A DEDUCTION OF RS.973.80 LAKHS IN THE PROFIT & LOSS A/C FOR THE YEAR ENDED ON 31.03.2006 UNDER THE HEAD 'PRIOR PERIOD & EXCEPTIONAL ITEMS' (NET OF TAX). THE DEDUCTION OF R S.973.80 LAKHS HAS BEEN WORKED OUT AS FOLLOWS AS GIVEN IN NOTES NO .8 AT PAGE 55 OF ANNUAL REPORT. (A) PRIOR PERIOD ITEMS : (RS. IN LAKHS) A) REDUCTION OF INCOME FROM ADVANCE LICENSES 1078.85 B)RESTATEMENT OF OPENING FINISHED GOODS, RAW MATERI ALS &WIP 518.29 C) EXCISE DUTY IN VALUATION OF RAW MATERIAL INVENTO RY, CONSEQUENT TO (A) ABOVE 94.2 7 D) RESTATEMENT OF OPENING STOCK OF FINISHED GOODS A ND WIP DUE TO REFINEMENT IN ABSORPTION AND ALLOCATION OF C ERTAIN OVERHEADS COST (34.46) E) PROVISION FOR SALES COMMISSION 94.75 F) PROVISION FOR DOUBTFUL DEBTS 277.52 TOTAL 2029.22 B. EXCEPTIONAL ITEMS - INCOME FROM OUT OF COURT SETTLEMENT (669.42) C. DEFERRED TAX CREDIT THEREON (386.00) TOTAL (973.80)' 6.1 AS CAN BE SEEN FROM THE REASONS RECORDED, ASSES SMENT HAS BEEN REOPENED ON THE ALLEGATION THAT ASSESSEE HAS C LAIMED DEDUCTION 6 ITA NO 1350/HYD/2011 NEULAND LABORATORIES LTD. OF PRIOR PERIOD AND EXCEPTIONAL ITEMS AMOUNTING TO RS. 9,73,80,000, WHICH DOES NOT RELATE TO ASSESSMENT YEAR UNDER CONS IDERATION, HENCE, CANNOT BE ALLOWED. HOWEVER, IN THIS CONTEXT, IT IS NECESSARY TO SEE WHETHER THIS ISSUE WAS EXAMINED BY AO AT THE TIME O F ORIGINAL ASSESSMENT AND WHETHER ASSESSEE HAS DISCLOSED THE M ATERIAL FACTS RELATING TO THE PRIOR PERIOD AND EXCEPTIONAL ITEMS. AS CAN BE SEEN FROM THE FACTS DISCUSSED BY LD. CIT(A) IN PARAS 5.4 . AND 5.4.1 OF HIS ORDER, NOT ONLY ASSESSEE HAS DISCLOSED FULL PARTICU LARS WITH REGARD TO PRIOR PERIOD AND EXCEPTIONAL ITEMS IN ITS FINAL ACC OUNTS, BUT, EXPLANATORY NOTES WAS ALSO APPENDED WITH THE FINAL ACCOUNTS WITH REGARD TO SUCH CLAIM. IT IS ALSO CLEAR THAT AO AT T HE TIME OF ORIGINAL ASSESSMENT HAS ENQUIRED INTO THIS ASPECT AND CALLED FOR DETAILS FROM ASSESSEE AND AFTER EXAMINING THE INFORMATIONS SUBMI TTED BY ASSESSEE, HE HAS COMPLETED ASSESSMENT. IN FACT, AO WHILE COMPLETING ASSESSMENT HAS ALSO DISALLOWED A PART OF EXPENDITURE RELATING TO PREVIOUS YEAR. FROM THE AFORESAID FACTS , IT IS CLEAR THAT NOT ONLY ASSESSEE HAS DISCLOSED ALL MATERIAL FACTS RELA TING TO PRIOR PERIOD AND EXCEPTIONAL ITEMS, BUT, AO WHILE COMPLETING ORI GINAL ASSESSMENT HAS EXAMINED THE SAME AND COMPLETED ASSESSMENT ACCO RDINGLY. IT IS FURTHER REVEALED FROM THE REASONS RECORDED THAT THE RE ARE NO TANGIBLE MATERIAL BEFORE AO TO FORM THE BELIEF THAT INCOME H AS ESCAPED ASSESSMENT. ONLY ON REAPPRAISAL OF THE MATERIALS AV AILABLE AND CONSIDERED AT THE TIME OF ORIGINAL ASSESSMENT AND W HICH WERE ALSO EXAMINED DURING ORIGINAL ASSESSMENT, AO HAS REOPENE D ASSESSMENT U/S 147 OF THE ACT. IN THE REASONS RECORDED, AO HIM SELF HAS EXPRESSED THE FACT THAT ON REVIEW HE HAS NOTED ASSE SSEE HAS CLAIMED DEDUCTION OF RS. 9,73,80,000 IN THE P&L ACCOUNT TOW ARDS PRIOR PERIOD AND EXCEPTIONAL ITEMS, WHICH IS NOT RELATABLE TO CU RRENT YEAR. AN ISSUE WHICH HAS ALREADY BEEN CONSIDERED AND DECIDED IN OR IGINAL ASSESSMENT CANNOT BE SUBJECTED TO REOPENING U/S 147 AS IT WILL AMOUNT TO REVIEW OF EARLIER ASSESSMENT ORDER. THE H ONBLE SUPREME COURT IN CASE OF CIT VS. KELVINATOR INDIA LTD. (SUP RA) WHILE EXAMINING 7 ITA NO 1350/HYD/2011 NEULAND LABORATORIES LTD. THE SCOPE AND AMBIT OF POWER CONFERRED U/S 147 OF T HE ACT, HELD AS UNDER: THE CONCEPT OF CHANGE OF OPINION ON THE PART OF T HE AO TO REOPEN AN ASSESSMENT DOES NOT STAND OBLITERATED AFT ER THE SUBSTITUTION OF SECTION 147 OF THE IT ACT, 1961, BY THE DIRECT TAX LAWS (AMENDMENT) ACTS, 1987 AND 1989. AFTER THE AME NDMENT, THE AO HAS TO HAVE REASON TO BELIEVE THAT INCOME HA S ESCAPED ASSESSMENT, BUT THIS DOES NOT IMPLY THAT THE AO CAN REOPEN AN ASSESSMENT ON MERE CHANGE OF OPINION. THE CONCEPT O F CHANGE OF OPINION MUST BE TREATED AS AN IN-BUILT TEST TO CHECK THE ABUSE OF POWER. HENCE AFTER APRIL 1, 1989, THE AO H AS POWER TO REOPEN AN ASSESSMENT, PROVIDED THERE IS TANGIBLE M ATERIAL TO COME TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASON MUST HAVE A LINK WITH THE F ORMATION OF THE BELIEF. 6.2 THE FULL BENCH OF THE HONBLE DELHI HIGH COURT IN CASE OF USHA INTERNATIONAL LTD., AFTER TAKING NOTE OF A NUMBER O F DECISIONS OF THE HONBLE SUPREME COURT AS WELL AS DIFFERENT HIGH COU RTS INCLUDING DECISION OF CIT VS. KELVINATOR INDIA (SUPRA) HELD A S UNDER: 39. IN VIEW OF THE ABOVE OBSERVATIONS WE MUST ADD ONE CAVEAT. THERE MAY BE CASES WHERE THE ASSESSING OFFICER DOES NOT AND M AY NOT RAISE ANY WRITTEN QUERY BUT STILL THE ASSESSING OFFICER IN TH E FIRST ROUND/ ORIGINAL PROCEEDINGS MAY HAVE EXAMINED THE SUBJECT MATTER, C LAIM ETC, BECAUSE THE ASPECT OR QUESTION MAY BE TOO APPARENT AND OBVIOUS. TO HOLD THAT THE ASSESSING OFFICER IN THE FIRST ROUND DID NOT EXAMIN E THE QUESTION OR SUBJECT MATTER AND FORM AN OPINION, WOULD BE CONTRARY AND O PPOSED TO NORMAL HUMAN CONDUCT. SUCH CASES HAVE TO BE EXAMINED INDIV IDUALLY. SOME MATTERS MAY REQUIRE EXAMINATION OF THE ASSESSMENT O RDER OR QUERIES RAISED BY THE ASSESSING OFFICER AND ANSWERS GIVEN BY THE A SSESSEE BUT IN OTHERS CASES, A DEEPER SCRUTINY OR EXAMINATION MAY BE NECE SSARY. THE STAND OF THE REVENUE AND THE ASSESSEE WOULD BE RELEVANT. SEVERAL ASPECTS INCLUDING PAPERS FILED AND SUBMITTED WITH THE RETURN AND DURI NG THE ORIGINAL PROCEEDINGS ARE RELEVANT AND MATERIAL. SOMETIMES AP PLICATION OF MIND AND FORMATION OF OPINION CAN BE ASCERTAINED AND GATHERE D EVEN WHEN NO SPECIFIC QUESTION OR QUERY IN WRITING HAD BEEN RAISED BY THE ASSESSING OFFICER. THE ASPECTS AND QUESTIONS EXAMINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF MAY INDICATE THAT THE ASSESSING OFFICER MUST HAVE APPLIED HIS MIND ON THE ENTRY, CLAIM OR DEDUCTION ETC. IT M AY BE APPARENT AND OBVIOUS TO HOLD THAT THE ASSESSING OFFICER WOULD NO T HAVE GONE INTO THE SAID QUESTION OR APPLIED HIS MIND. HOWEVER, THIS WOULD D EPEND UPON THE FACTS AND CIRCUMSTANCES OF EACH CASE. 6.3 APPLYING THE TEST LAID DOWN IN THE DECISIONS RE FERRED TO HEREINABOVE, IT CAN BE SEEN THAT IN THE PRESENT CAS E, AO HAS 8 ITA NO 1350/HYD/2011 NEULAND LABORATORIES LTD. COMPLETED ORIGINAL ASSESSMENT AFTER MAKING DUE ENQU IRY AND PROPER APPLICATION OF MIND ON THE ISSUE ON WHICH ASSESSMEN T WAS REOPENED. ONLY BECAUSE AO HAS ACCEPTED THE DEDUCTION CLAIMED TOWARDS PRIOR PERIOD AND EXCEPTIONAL ITEMS WITHOUT MAKING ANY REF ERENCE IN THE ASSESSMENT ORDER, IT CANNOT BE SAID THAT THE ISSUE WAS NOT EXAMINED BY AO. HENCE, IN OUR VIEW, REOPENING IN THE PRESEN T CASE WOULD AMOUNT TO CHANGE OF OPINION OR A REVIEW OF ASSESSME NT ORDER EARLIER PASSED WHICH IS NOT PERMISSIBLE IN LAW. ACCORDINGLY , WE UPHOLD THE ORDER OF LD. CIT(A) BY DISMISSING GROUNDS RAISED BY REVENUE. 7. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 19/11/2014. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD, DATED: 19 TH NOVEMBER, 2014 KV COPY TO:- 1) ACIT, CIRCLE 16(1), ROOM NO. 612, 6 TH FLOOR, AAYAKAR BHAVAN, BASHEER BAGH, HYDERABAD. 2) M/S NEULAND LABORATORIES LTD., FLAT NO. 204, 2 ND FLOOR, MERIDIAN PLAZA, 6-3-853/1, AMEERPET, HYDERABAD. 3) CIT(A)-V, HYDERABAD 4) CIT-IV, HYDERABAD 5)THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDER ABAD. 9 ITA NO 1350/HYD/2011 NEULAND LABORATORIES LTD. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S. 2. DRAFT PLACED BEFORE AUTHOR SR.P.S 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER VP 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S. 6. KEPT FOR PRONOUNCEMENT ON SR.P S. 7. FILE SENT TO THE BENCH CLERK SR.P.S. 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER