Sutlej Textiles and Industries Ltd., Rajasthan V. DCIT, New Delhi

ITA 3703/DEL/2015

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9124 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 07-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ROHIT JAIN
• Section: 148; 12; 10; 15; 48; 73

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C” DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.3703/DEL/2015 Assessment Year 2007-08 Sutlej Textiles and Industries Ltd., Pachpahar Road, Bhawanimandi, Rajasthan. v. Dy. Commissioner of Income Tax, Circle-24(2), New Delhi. TAN/PAN: AAJCS1850N (Appellant) (Respondent) I.T.A. No.3371/DEL/2015 Assessment Year 2007-08 Dy. Commissioner of Income Tax, Circle-9(1), New Delhi. v. Sutlej Textiles and Industries Ltd., Pachpahar Road, Bhawanimandi, Rajasthan. TAN/PAN: AAJCS1850N (Appellant) (Respondent) Appellant by: Shri Rohit Jain, Adv. Shri Saksham Singhal, Adv. Respondent by: Shri Anuj Garg, Sr.D.R. Date of hearing: 01 08 2022 Date of pronouncement: 08 08 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: Th e cap tio n ed cro ss ap p eals h av e b een fil ed b y th e Assessee an d th e Rev en u e resp ect iv ely seek in g to imp u g n ed the act io n o f th e CIT(A). 2 . Th e g ro u nd s o f ap p eal ra ised b y th e assesse e read s as u n d er: “ 1 . T h a t t h e CI T (A ) e r re d o n f a c t s a n d i n l a w i n no t h o l d i n g I.T.A. No.3703 & 3371/DEL/2015 2 t h a t t h e re a s s e s sm e n t o rd e r d a t e d 0 4 . 0 3 . 2 0 1 3 p a s se d b y t h e a s s e ss i n g o f f i c e r u n d e r s e c t i o n 1 4 7 / 1 4 3 (3 ) o f t h e In c o m e - t a x A c t , 1 9 6 1 (“ t h e A c t ” ) t o b e b e y o n d j u r i sd i c t i o n , b a d i n l a w a n d v o i d - a b - i n i t i o . 1 . 1 T h a t t h e CI T (A ) e r r e d o n f a c t s a n d i n l a w i n n ot a p p r e c i a t i n g t h a t p r o c e e d i n g s u n d e r se c t i o n 1 4 7 o f t h e A c t we r e i n i t i a t e d o n a m e r e c h a n g e o f o p i n i o n , w i t h o u t f o r ma t i o n o f re a so n a b l e b e l i e f r e g a r d i n g e s c a p e m e n t o f i n c o m e , wh i c h i s si n e - q u a - n o n f o r a s s u m p t i o n o f v a l i d j u r i s d i c t i o n . 1 . 2 T h a t t h e CI T (A ) e r r e d o n f a c t s a n d i n l a w i n n ot a p p r e c i a t i n g t h a t e n t i re m a t e ri a l f a c t s w e re d i s c l os e d b y t h e a p p e l l a n t d u ri n g t h e o ri g i n a l a s s e ss m e n t p ro c e e d i n gs a n d n o n e w t a n g i b l e m a t e r i a l / i n f o rm a t i o n h a d c o m e i n t o e xi s t e n c e t o j u st i f y r e o p e n i n g o f a s s e ss m e n t . 2 . T h a t t h e CI T (A ) e rr e d o n f a c t s a n d i n l a w i n n o t h o l d i n g t h a t a s se s s m e n t o r d e r p a s se d b y t h e a s s e s si n g o f f i ce r u n d e r se c t i o n 1 4 7 / 1 4 3 (3 ) o f t h e A c t , b e i n g n o n - s p e a k i n g , t o b e b a d i n l a w. Wi t h o u t P r e j u d i c e 3 . T h a t t h e CI T (A ) e rr e d o n f a c t s a n d i n l a w i n n o t d e l e t i n g t h e a d d i t i o n o f R s. 3 , 0 1 , 0 5 , 5 4 6 m a d e b y t h e a s s e s si ng o f f i c e r o n a c c o u n t o f a d d i t i o n a l d e p r e c i a t i o n c l a i m e d b y t h e ap p e l l a n t o n p l a n t a n d m a c h i n e r y . 3 . 1 T h a t t h e CI T (A ) e r r e d o n f a c t s a n d i n l a w i n n ot a d j u d i c a t i n g t h e i s su e o f a d d i t i o n o f a d d i t i o n a l d ep r e c i a t i o n h o l d i n g t h e sa m e t o b e a c a d e m i c i n n a t u re . 3 . 2 T h a t t h e CI T (A ) e rr e d o n f a c t s a n d i n l a w i n n ot d e l e t i n g I.T.A. No.3703 & 3371/DEL/2015 3 t h e a f o re s a i d a d d i t i o n m a d e b y t h e a s s e s si n g o f f i c er o n e r r o n e o u s p re m i s e t h a t t h e s a i d d e p re c i a t i o n s t o o d c l a i m e d b y t h e a p p e l l a n t i n t h e r e t u rn o f i n c o m e f o r a s s e s s m e nt y e a r 2 0 0 6 - 0 7 . 4 . Wi t h o u t p r e j u d i c e , i n c a s e t h e a p p e l l a n t ’ s c l a i m o f a d d i t i o n a l d e p re c i a t i o n i s h e l d t o b e n o t a l l o w a b l e i n a ss e s s m e n t y e a r 2 0 0 7 - 0 8 , t h a t t h e s a m e sh o u l d b e d i re c t e d t o be a l l o w e d i n a s s e ss m e n t y e a r 2 0 0 6 - 0 7 . 5 . T h a t t h e CI T (A ) e r r e d o n f a c t s a n d i n l a w i n u p ho l d i n g t h e d i sa l l o wa n c e o f R s. 6 , 1 5 , 8 4 7 o n a c c o u n t o f p ri o r p e ri o d e x p e n s e s. 5 . 1 T h a t t h e CI T (A ) e r r e d o n f a c t s a n d i n l a w i n n ot a d j u d i c a t i n g t h e i s s u e o f d i s a l l o w a n c e o f p r i o r p e ri o d e x p e n se s h o l d i n g t h e sa m e t o b e a c a d e m i c i n n a t u re . 5 . 2 T h a t t h e CI T (A ) e r r e d o n f a c t a n d i n l a w i n n o t a p p r e c i a t i n g t h a t t h e a f o r e s a i d p r i o r p e ri o d e x p e n se s c r y st a l l i z e d d u r i n g t h e r e l e v a n t a s se s sm e n t y e a r a nd a c t u a l l y re p re s e n t e d a m o u n t a s c e rt a i n e d / s e t t l e d / p a i d d u r i ng t h e re l e v a n t a s se s sm e n t y e a r . 6 . Wi t h o u t p r e j u d i c e , i n c a s e t h e a p p e l l a n t ’ s c l a i m o f d e d u c t i o n o f p r i o r p e ri o d e x p e n s e s i s h e l d t o b e d is a l l o w a b l e , t h e n , p r i o r p e ri o d i n c o m e o f R s . 2 3 , 4 9 , 6 1 1 o f f e r e d by t h e a p p e l l a n t i n t h e re t u r n o f i n c o m e sh o u l d a l so b e h el d t o b e n o t l i a b l e f o r t a x . 7 . T h a t o n t h e f a c t s a n d c i r c u m s t a n c e s o f t h e c a se a n d i n l a w su b si d i e s r e c e i v e d b y t h e a p p e l l a n t u n d e r v a ri o u s sc h e m e s o f t h e Ce n t ra l / S t a t e G o v e r n m e n t a g g re g a t i n g R s. 1 3 , 5 5 , 9 6 , 73 6 / - s h o u l d b e d i re c t e d t o b e e x c l u d e d f ro m t h e t a x a b l e i n c o m e o f t h e I.T.A. No.3703 & 3371/DEL/2015 4 a p p e l l a n t , b e i n g i n t h e n a t u r e o f c a p i t a l r e c e i p t , n o t l i a b l e t o t a x . 7 . 1 T h a t t h e CI T (A ) e r r e d o n f a c t s a n d i n l a w i n n ot a d j u d i c a t i n g g r o u n d No . 6 t a k e n b y t h e a p p e l l a n t r e ga rd i n g e x c l u s i o n o f t h e a f o r e sa i d su b si d i e s a g g r e g a t i n g R s. 1 3 , 5 5 , 9 6 , 7 3 6 / - f ro m t h e t a x a b l e i n c o m e o f t h e a pp e l l a n t , wi t h o u t a ss i g n i n g a n y r e a s o n . ” 3 . Th e g ro u nd s o f ap p eal ra ised b y th e Rev en u e reads as u n d er: “ 1 . T h e L d . CI T (A ) e r r e d i n l a w a n d o n t h e f a c t s i n d e l e t i n g t h e a d d i t i o n s m a d e f o r c a l c u l a t i n g b o o k p ro f i t u / s.1 1 5 J B o f t h e I n c o m e T a x A c t , 1 9 6 1 o f R s. 5 7 , 8 1 , 1 2 3 / - o n a c c o u n t of p r o v i si o n s f o r re t i re m e n t b e n e f i t s . ” 4 . As p er its g ro u nd s, th e ass esse e h as ch all en g ed th e o rder o f th e CIT(A) b o th o n ju risd i ct io n as we l l as meri ts . 5 . Th e ju risd i ct io n b ein g u n d er ch allen g e, we d ee m it ex p ed ien t to d eal wi th th e ch all en g e to th e ju ris d ict io n at th e o u tse t. 6 . Th e assesse e h as c h allen g ed th e ju ris d ict io n assu med b y th e Assessin g Officer u n d er Sectio n 1 47 o f th e Act o n th e b asis o f reaso n s reco rd ed un d er Sectio n 1 4 8 (2) o f th e Act . 7 . Th e reaso n s reco rded u nd er Sectio n 1 4 8 fo r Assessmen t Year 2 0 07 -08 in qu estio n b ein g cen tral to d etermi n atio n o f ju risd ic tio n al ch a ll en g e, is rep ro d u ced h ereu n d er: “ R e t u r n d e c l a ri n g t o t a l i n c o m e o f R s. 1 0 , 7 6 , 0 9 , 1 9 7 / - a n d R s. 4 1 , 8 4 , 2 9 , 6 2 8 / - u n d e r M A T w a s f i l e d o n 2 8 / 1 0 / 2 0 0 7. S u b s e q u e n t l y , a ss e s sm e n t i n t h i s c a se wa s m a d e u / s 1 4 3 (3 ) a t a i n c o m e o f R s . 4 3 , 9 5 , 8 4 , 3 6 0 / - u n d e r M A T o n 2 3 / 1 1 / 2 0 0 9. I.T.A. No.3703 & 3371/DEL/2015 5 D u ri n g t h e y e a r , p e r u sa l o f re c o r d s r e v e a l e d t h a t th e a s se s s e e h a d c l a i m e d a d d i t i o n a l d e p r e c i a t i o n o f R s. 3 , 0 1 , 0 5 , 54 6 / - o n t h e a d d i t i o n o f p l a n t a n d m a c h i n e ry o f t h e l a st y e a r o n wh i c h d e p r e c i a t i o n wa s a l re a d y c l a i m e d i n t h e A . Y . 2 0 0 6 - 07 . T h e r e f o r e , a n a m o u n t o f R s . 3 , 0 1 , 0 5 , 5 4 6 / - sh o u l d b e a d d e d b a c k t o t h e i n c o m e o f t h e a s s e ss e e . F u r t h e r , i t i s a l so n o t i c e d t h a t a n a m o u n t o f R s. 3 6, 7 8 , 5 3 0 / - a s “ P r o v i s i o n f o r d o u b t f u l d e b t s” a n d R s . 5 7 , 8 1 , 1 2 3 / - as “ P ro v i si o n f o r R e t i r e m e n t b e n e f i t s we r e a d d e d b a c k w h i l e c o m p ut i n g t h e i n c o m e u n d e r n o r m a l p ro v i si o n o f t h e A c t . B u t wh i l e c o m p u t i n g t h e i n c o m e u n d e r sp e c i a l p ro v i si o n s o f t h e A c t . Wh il e c o m p u t i n g t h e i n c o m e u n d e r sp e c i a l p r o v i si o n s o f t h e A c t , t h is a m o u n t wa s n o t a d d e d b a c k b e i n g a n u n a s c e rt a i n e d l i a b i l i t y . T he sa m e sh o u l d b e a d d e d wh i l e c o m p u t i n g i n c o m e u n d e r s p e c i al p r o v i s i o n s o f t h e A c t . O n p e r u sa l o f 3 CD re p o rt (a n n e x u re - 1 5 ), i t i s r e v e al e d t h a t t h e a s s e ss e e h a s p ri o r p e ri o d i n c o m e o f R s. 2 3 , 4 9 , 6 1 1 / - b u t h a s o f f e r e d o n l y R s. 1 7 , 3 3 , 7 6 4 / - f o r t a x a t i o n i n P ro f i t a n d L o s s a c c o u n t . T h e d i f f e r e n c e o f R s . 6 , 1 5 , 8 4 7 / - (2 3 , 4 9 , 6 1 1 - 1 7 , 3 3 , 7 6 4 ) sh o u l d b e a d d e d b a c k t o t h e i n c o m e o f t h e a s s e ss e e . I n v i e w o f t h i s, 1 h a v e re a so n t o b e l i e v e t h a t a n am o u n t o f R s. 4 , 0 1 , 8 1 , 0 4 6 / - ( 3 , 0 1 , 0 5 , 5 4 6 + 3 6 , 7 8 , 5 3 0 + 5 7 , 8 1 , 12 3 + 6 , 1 5 , 8 4 7 ) h a s e sc a p e d a s s e s sm e n t wi t h i n t h e m e a n i n g o f s e c t i o n 1 4 7 o f t h e I T A c t , 1 9 6 1 . ” A C1 T , Ci r c l e - 9 (1 ) , Ne w D e l h i ” 8 . Th e ld . co u n sel fo r th e assessee s tro n g ly co n tend ed that th e n o tice i ssu ed u n der Sect io n 1 48 is il leg al an d issued with o u t sat isfy in g th e p re-req u isites o f Sec tio n 1 4 7 o f th e Act. It was I.T.A. No.3703 & 3371/DEL/2015 6 su b mit ted th a t th e assess men t was earli er carried ou t u nd er Sect io n 1 4 3 (3 ) o f th e Act v id e o rd er d ated 2 7 .1 1 .2 009 wh ich h as b een so u gh t to b e reo p en ed b y issuan ce o f n o t ice u nd er Sect io n 1 4 8 d ated 16 .0 1 .2 01 2 . To su pp o rt its cla i m fo r lack o f j u risd ict ion u n d er Sectio n 1 4 7 o f th e Act, th e l d . co u n sel fo r th e assessee b ro ad ly su b mitt ed th at ; (i) th e Assess in g Offic er has p ro ceed ed o n fac tu al ly in co rrect p remi se; (i i) th e d isp o sal o f ob ject i o n th ereon b y Assessin g Offi cer with o u t an y sp eak in g reaso n s an d in a non ch all an t man n er. We sh all d eal with th e n u an ces o f v ario u s o b jectio n s at ap p rop riate p lac e in su c ceed in g p aragrap h s. 9 . Th e ld . DR fo r th e Rev en u e rel ied u p on th e act ion o f th e lo wer au th o rities a n d sub mit ted th at n o fau lt can be fo u n d in th e act io n o f th e Asse ssin g Officer in th e b ack d rop o f th e fac ts o f th e p resen t case . It was fu rth er su b mi t t ed th at wh ere th e Assessin g Officer h as fo rme d p rima fa cie b el i ef b ased o n relev a n t ma ter ial av ail ab le wi th h i m, su ffi cien cy o f th e b el ie f p er s e can n o t b e ex amin ed v is-à-v is reaso n s reco rd ed fo r escap emen t. 1 0 . We h av e co n sid ered th e riv a l su b mi ssio n s an d the ma teri al referred to an d reli ed u p on in th e co u rse o f h earing . Th e assu mp t io n o f ju risd ict io n u nd er Sectio n 1 4 7 b ein g su bjec t ma t ter o f ch a llen g e an d g o es to th e v ery ro o t o f th e su b ject ma tt er, th e same is d ea lt wi th h ereu n d er. 1 0 .1 On p eru sal o f th e reaso n s reco rd ed, we o b serv e th at th e Assessin g Offic er h as so u g h t to reo pen th e co mp le ted assess men t all eg in g escap e men t o n th ree co u n ts; (i) in co rrect cla i m o f ad d itio n al d ep rec i atio n o f Rs.3 0 1 ,0 5 ,5 4 6 /- alread y cla i med in th e assess men t y ear 2 0 06 -07 ; (ii) p ro v isio n s o f d o u b tful d eb t o f Rs.3 6 ,7 8 ,5 3 0 /- an d p ro v isio n s fo r Ret iremen t Ben efit a t I.T.A. No.3703 & 3371/DEL/2015 7 Rs.5 7 ,8 1 ,1 2 3 /- h ave n o t b een ad ju st e d u p ward an d the b o ok p ro fit red u ced du e to such p rov isio n s were n o t in creased to th is ex ten t wh ereas su ch p ro v isio n s are in th e n atu re o f u n ascert ain ed liab il it ies ; (i i i) th e assess ee h as o n ly o ffered Rs.1 7 ,3 3 ,7 6 4 /- as ag ain st th e ac tu al p rio r p erio d in co me o f Rs .2 3 ,4 9 ,6 1 1 /-. 1 0 .2 Th e assesse e fi le d a d etai led o b je ctio n th ere to d ate d 6 t h Au gu st, 2 0 1 2 b efo re th e Assessin g Officer se ek in g to ch allen g e th e reaso n s so reco rd ed in th e l ig h t o f th e ju d g ment o f th e Ho n ’b le Su p reme Co u rt in th e case o f GKN Drivesh a f ts (In d i a ) Ltd . vs . ITO as rep o rted in (2 0 0 3 ) 2 5 9 ITR 1 9 (S C ). Th e o b jec t io n s p laced b efo re Assess in g Offic er were a d v erted . On p erusal o f th e afo resa id o b jectio n s, we ob serv e th at th e assesse e co n ten d ed b efo re th e Asses s in g Officer th at ad d itio n al d ep reci atio n was cla i med o n p u rch ase o f ‘p lan t an d mach in ery ’ in th e Assess men t Year 2 0 06 -07 @ 1 0 % in stead o f 2 0 % elig ib le to th e assess ee h av in g reg ard to th e fac t th a t th e as sets were p u t to u se fo r l ess th an 1 80 d ay s. Co n seq u en tly , th e assessee was en titled to rema in in g ad d itio n al d ep recia tio n in th is y ear an d th u s co rrectly cla i med in acco rd an ce wi th l aw an d assessed b y th e Assessin g Officer in th e o ri g in al ass ess men t i n th e l ig h t o f th e tax au d it rep o rts, ac tio n s o f th e e arl ier y ear a n d th e law p rev ai l in g in th i s reg ard . Th e asse ssee th u s co n ten d s th at th e al le g atio n o f escap e men t to ward s ex tra cl ai m o f ad d i tio n al d ep recia t io n is mi sco n ceiv ed in law an d o n fact s. Th e assess ee essen t ial ly co n ten d s th at ad dit io n al d ep recia tio n elig ib le to asse ssee were b ifu rca ted in two Assessmen t Years 2 0 06 -07 an d 20 0 7-0 8 an d no escap e men t h as o ccu rred to su ch actio n . We n o ti ce th at wh il e d isp o sin g th e o b jectio n s, th e Assess in g Officer h as n o t to u ch ed u p on th e fac tu al ma trix n arrat ed i n th e o b jec tio n at a l l. Th e I.T.A. No.3703 & 3371/DEL/2015 8 Assessin g Offi cer, in o ur op in io n , has fa il ed to carry o u t qu a si ju d icia l d u ty cas t u p on h im in th is r eg ard . Th e Assessin g Officer was ex p ected to d eal wi th th e fac tu al as sert io n s o f su ch v ital n atu re an d g iv e a co n clu siv e fin d in g in th is reg ard in acco rd an ce with law. Th e Assessin g Offi cer h as fail ed to d o so. Th e Assessin g Officer h as d ecl in e d to en tertain th e o b ject io n o f th e ass essee o n ly o n th e ab strac t rea so n in g th at wh ere n o o p in io n h as b een fo rmed in th e o rig in al asse ssmen t. On th is iss u e, th e q u estio n o f ch an g e o f o p in io n d o es n o t aris e. We to t al l y d isag ree wi th the co u rse ad o p ted b y th e Assessin g Offi cer wh i le d i sp o sin g o f th e o b ject io n . Th e ex p lan at io n o ffered b y th e asse ssee is p lain and si mp le an d th e Assessin g Offic er co u ld n o t h av e sh un n ed asid e su ch ex p lan atio n wi th o u t d ea lin g wi th i t. 1 0 .3 Befo re u s as we l l, Mr. Ja in , th e ld . co u n sel fo r th e ass essee h as d emo n strated o n facts th a t th e ad d itio n al d ep reci atio n was cla i med o n ½ th e p er cen ta g e o f th e en ti tle men t d u e to p artia l u se o f asse ts in th e earl ier y ear fo r l esser n u mb er o f d ay s. Th e asssesse e was en ti tl ed in law to cla im re main in g add itio n al d ep reciat io n in th e cu rren t y ear wh en th e asset was u n der u se. Th e ad mis sio n o f th e cla i m b y th e Asse ssin g Offic er in t h e o rig in al assess men t th u s ca n n o t b e said to b e in d efian ce o f la w. Cle arly , th e Assessin g Offic er h as p ro ceed ed o n wh o lly erro neou s p resu mp tio n o f fac ts n o t b ein g in th e n atu re o f liab il ity i n th e first in stan ce . Th ere b e in g n o escap emen t , th e reo p en in g o n th is co u n t was n o t ju s ti fied a t al l. 1 0 .4 Ad v ertin g to th e seco n d reason , we tak e n o tice o f th e p l ea o n b eh alf o f th e ass essee th at th e ‘p r o v isio n s fo r d o ubtfu l d eb ts’ can n o t b e termed as u n ascerta in ed l iab i li ti es in the l i g h t o f th e I.T.A. No.3703 & 3371/DEL/2015 9 ju d g men t o f th e Ho n ’b le Su p reme Co u rt in th e c ase of CIT vs . HCL Co mn et S ystems & S e rvi ces Ltd ., as rep o rted in 3 0 5 ITR 4 09 (S C ). Th e p lea o f t h e assessee b ein g th e tu n e o f law la id d own by th e Ho n ’b le Su p reme Co u rt, we fi n d merit in th e p lea o f th e assesse e. A d eb t b ein g an asset an d n o t a liab i l ity, co n seq u en tial p ro v isio n s on acco u n t o f d o ub tfu l rec o v ery can no t be all eg ed to b e an u n ascertain ed liab il ity as co rrectly p le ad ed . Thu s, no ad ju st men t was req u ired as p er th e extan t l aw wh ile co mp u tin g th e b o ok p ro fit o n acco u n t o f imp a irmen t / d imin u tio n of assets . Fo r arriv in g at su ch co n clu sio n , we also n o tice th at c la u se (i) to Ex p lan atio n -1 ap pen d ed to su b Sectio n 2 o f Sect io n 1 1 5 JB d o es n o t fea tu re in th e reaso n s reco rd ed an d th e so li tary b asis fo r escap e men t is al leg at io n to ward s u n ascerta in ed li abil ity . As n o ticed earl ier, th e p ro v isio n fo r d ou b tfu l d eb t d oes no t b ear th e n atu re o f liab i li t y p er se an d th erefo re, th e fo u nd atio n fo r cla i min g esc ap eme n t b y Assessin g Offi cer is sh ak en to i ts ro o ts. 1 0 .6 As reg ard s p rovisio n s o f Re tire men t Ben e fi t, it was co n ten d ed in th e ob ject io n th at th e s aid p ro v isio n was o n acco un t o f leav e en cash men t o n th e b asis o f actu ari al v al u atio n an d th erefo re th e p ro v isio n was in th e n atu re o f ‘ascertain e d liab i li ty ’ in co n trast to o b se rv atio n o f th e Ass essin g Offi cer an d th u s d o es n o t q u ali fy fo r ad d it io n /ad ju st men t fo r th e b as is of co mp u tat io n o f b o ok p ro fit u n d er th e sp eci al p ro v isi o n s o f Sect io n 1 15 JB o f th e Act. We fin d meri t in th e afo resa id p lea in th e ligh t o f th e fa ctu a l ma trix . 1 0 .7 Th e seco n d reason fo r reo p en ing is also th u s with o u t an y leg al b as is. Th e assess men t was c o mp let ed in th e i nstan t case u n d er Sectio n 1 4 3(3 ) o f th e Ac t an d al l th ese fa cts were mad e I.T.A. No.3703 & 3371/DEL/2015 10 av ail ab le b e fo re th e Assessin g Office r. Th e Assessin g Offic er was n o t ju sti fi ed in mak in g alleg a tio n o f escap e men t q ua b o ok pro fit o n th is sco re. 1 0 .8 Th e th ird g rou nd fo r reo p en in g is b ased o n alleg atio n o f lo wer rep o rtin g o f p rio r p erio d in co me. Th e assessee co n ten d s th at wh en th e in co me it sel f is p rio r p erio d in co me an d rela te s to earl ier y ears, wh ere i s th e q u estio n o f esc a p emen t o f ch arit a b le in co me b y su ch in co me o f ear li er y ear. Seco n d ly , th e a ss essee h ad ad ju sted th e p rio r p erio d ex p en se ag ain st p rio r p erio d in co me in sy n c with p leth o ra o f ju d ic ia l p rec ed en ts in clu d in g S a u ra sh tra Cemen t & Ch emi ca l In d u stries vs. CIT, 2 1 3 ITR 5 2 3 (Gu j.) wh erein it h as b e en cle arly h e ld th at th e a ssesse e is en ti t led to mak e su ch ad ju st men t an d o ffer th e n et in co me o f the ear li er y ears. Th u s, th e a ctio n o f th e Asses sin g Officer in th e o rig in al assess men t c an n o t b e assail ed an d th e alleg a tio n o f e scap emen t co u ld n o t h av e b een mad e in th e fa ctu al b ack d ro p . Th e ac tio n o f Assessin g Officer is th u s in th e real m o f rev iew b ased o n ch an ge o f o p in io n wh ich is n o t p ermiss i b le in law. We th u s fin d ju sti fica t io n in th e p lea o f th e ass esse e o n th is sco re to o as n o ted . 1 0 .9 No ticiab ly , th e As sessin g Offic er h as fa iled to d eal wi t h any o f th e o b ject io n raised b efo re h im an d p assed a su mmary o rd er with o u t d ealin g wi th an y o f th e o b jectio n b y a sp eak in g o rd er as cal led u p o n h im in th e ju d g men t o f t h e Su p reme Co u rt ren d ered in GKN Drivesh a ft (S u p ra ). Th is h as d efeated th e v ery p u rp o se o f th e p ro ced ure laid d o wn in GKN Drivesh a ft (su p ra ) fo r mee t in g th e o b jectio n s raised o n b eh alf o f th e a ssessee . No twith st an d in g , on scru p u lo u s ex amin atio n o f fac tu al b a ck d rop , we are sat is fied th a t th e reaso n s re co rd ed d o es n o t p ri ma fa cie in d ica te an y ac tu al I.T.A. No.3703 & 3371/DEL/2015 11 escap e men t an d d o es n o t sat is fy th e p re-req u isites o f S ect io n 1 47 in th e in stan t cas e wh ere th e ass es smen t was co mp l eted u n d er Sect io n 1 4 3 (3 ) o f t h e Act. 1 0 .1 0 In th e l ig h t o f th e d elin e at io n s mad e ab ov e, th e n o tice issu ed u n d er Sectio n 1 48 is with o ut leg a l fo u n d ation an d thu s req u ires to b e q u ash ed . Th e re-ass essmen t o rd er framed o n th e b asis o f su ch n o ti ce is wi th o u t san c tio n o f law an d th u s d o es n o t su rv iv e. 1 2 . Th e re-assess men t o rd er b ein g b ad in law, we d o n o t co n sid er it n ecess ary to g o in to th e meri ts u n d er ch all en g e o n b eh alf o f th e asses see. 1 3 . Th e ap p eal o f th e assess ee is th u s al lo wed in ter m o f o b serv atio n s n o ted ab o v e. 1 4 . Th e re-assessmen t o rd er b ein g b ad in law, g ro u nd s o f ap p eal o n merits ra ised b y th e Rev en u e d o es n o t su rv iv e. Th e ap p eal o f th e R ev en u e is th u s d is mis sed . 1 5 . In th e resu lt , th e ap p eal o f th e a sse ssee is a llo wed an d th e ap p eal o f th e Rev e n u e is d is missed . Order pronounced in the open Court on 08/08/2022. Sd /- Sd /- [KUL BHARAT] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /08/2022 Prabhat