M/S AGRA PRODUCTS PVT.LTD.,GAUTAM BUDDHA NAGAR V. DEPUTY C.I.T CIRCLE -2(1)(1), AGRA

ITA 121/AGR/2019

AI Insights

The case involves M/s Agra Products Pvt. Ltd., which appealed against the reassessment order for the Assessment Year 2012-13. The reassessment was initiated by the DCIT-Circle-2(1)(1), Agra, based on an audit objection, aiming to re-compute the Minimum Alternate Tax (MAT) liability and deny the adjustment of brought forward business losses. The primary contention was whether the reassessment was valid given that it was based on the same set of facts and documents as the original assessment. The Tribunal found that the reassessment did not meet the legal requirements for reopening a case, as there was no new tangible material to support the reassessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126468 (ITAT-AGRA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Other Referred Cases: Kelvinator of India Ltd. (187 Taxman 312)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAILENDRA SHRIVASTAVA LD.
• Assessee Lawyers: PANKAJ GARGH LD
• Keywords: Difference of opinion; Change of opinion; Audit objection; Reason to believe; Tangible material; Disallowance of expense; Commissioner; Commissioner of Income Tax; Review; AY 2011-12
• Section: 148; 143(3); 143(1); 115JB

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “DB” BENCH, AGRA BEFORE HON’BLE SHRI SATBEER SINGH GODARA, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं./ ITA No.121/Agr/2019 (िनधा \u000fरणवष\u000f / Assessment Year: 2012-13) M/s Agra Products Pvt. Ltd. Plot No. 99, Phase-II, NSEZ, Noida, Gautum Bhuddha Nagar, U.P. बनाम/ Vs. DCIT-Circle-2(1)(1), Agra \u0002थायीलेखासं./जीआइआरसं./PAN/GIR No.AADCA-3621-R (अपीलाथ /Appellant) : ( थ / Respondent) अपीलाथ कीओरसे/ Appellant by : Shri Pankaj Gargh (Advocate) – Ld. AR थ कीओरसे/Respondent by : Shri Shailendra Shrivastava – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 10-02-2025 घोषणाकीतारीख /Date of Pronouncement : 22.04.2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2012-13 arises out of an order of learned Commissioner of Income Tax (Appeals)- 2, Agra [CIT(A)] dated 31-01-2019 in the matter of an assessment framed by Ld. Assessing Officer (AO) u/s 143(3) r.w.s. 147 on 22-12-2017. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. 2. The assessee is stated to be engaged in manufacturing and export of silver jewellery. The assessee filed its return of income on 28-09-2012 which was scrutinized u/s 143(3) on 28-05-2014 after making adhoc disallowance of expense for Rs.1 Lacs. However, the assessment was 2 reopened, apparently, at the behest of audit objection and notice u/s 148 was issued on 30-03-2017. The case was reopened to re-compute the MAT liability of the assessee and to deny adjustment of brought forward business losses on the ground that the accumulated profits were in credit. The assessee offered same return of income as filed on 28-09-2012 and objected to the reopening. The assessee, inter-alia, contended that the initiation of reassessment proceeding was on the same set of facts which were already available before Ld. AO at the time of scrutiny assessment proceedings. The same was rejected by Ld. AO on the ground that no opinion was formed or expressed on this issue and further reopening could be done on audit objection. 3. On merits, it was noted by Ld. AO that the assessee computed its income u/s 115JB for Rs.118.68 Lacs. From this, the assessee reduced brought forward business loss of Rs.116.64 Lacs for AY 2011-12. This loss was brought forward as per Income Tax Act. The Ld. AO held an opinion that since the assessee had accumulated credit balance in its Profit & Loss Account as on 01-04-2011 for Rs.627.11 Lacs, it could not make such an adjustment. Accordingly, this adjustment was denied to the assessee. The Ld. CIT(A) confirmed the action of Ld. AO and also rejected the legal grounds as raised by the assessee against which the assessee is in further appeal before us. 4. From the facts, it clearly emerges that the re-assessment proceedings have been triggered on the basis of same material and financial documents which was available to Ld. AO during the course of regular assessment proceedings. The reasons do not indicate any event as to the receipt of any fresh tangible material coming to the possession of Ld. AO subsequent to culmination of original assessment proceedings. 3 Apparently, the re-assessment proceedings have been initiated on audit objection without there being any fresh or tangible material on record. This being the case, reopening would be nothing but mere change of opinion on existing material which is impermissible as per the decision of Hon’ble Apex Court in Kelvinator of India Ltd. (187 Taxman 312). In this decision, it was held by Hon’ble Supreme Court that the review of order is impermissible. The Hon’ble Court, inter-alia, held that Assessing Officer has power to reopen provided there is \"tangible material\" to come to the conclusion that there is escapement of income. There can be no review of an assessment in the guise of reopening and that a bare review without any tangible material would amount to abuse of the power. In this case, the Ld. AO reached the belief of escapement of income on going through the return of income filed by the assessee after the return was accepted u/s 143(1). The Hon’ble Court held that it was nothing but a review of the earlier proceedings and an abuse of power by AO. The less strict interpretation of the words \"reason to believe\" vis-à-vis an intimation issued u/s 143(1) cannot be permitted. There is no whisper in the reasons recorded, of any tangible material which came to the possession of the AO subsequent to the issue of the intimation which reflects an arbitrary exercise of the power conferred under section 147. The ratio of cited decision would squarely apply to the facts of present case. Considering the ratio of this decision, we would hold that the impugned order is liable to be quashed on legal grounds since Ld. AO did not have valid jurisdiction to reopen the case of the assessee. Delving into the merits has been rendered academic in nature. 4 5. The appeal stand allowed in terms of our above order. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- (SATBEER SINGH GODARA) (MANOJ KUMAR AGGARWAL) 3ा ियक सद4 /JUDICIAL MEMBER लेखा सद4 /ACCOUNTANT MEMBER Dated:22.04.2025 आदेश की 6ितिलिप अ8ेिषत / Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. थ /Respondent 3. आयकरआयु>/CIT 4. िवभागीय ितिनिध/DR 5. गाडDफाईल/GF ASSISTANT REGISTRAR ITAT AGRA "