The Tax Publishers2020 TaxPub(DT) 1586 (Bang-Trib)

INCOME TAX ACT, 1961

Section 147

AO completed original assessment accepting the declared income and had examined the issue of deduction under section 80P and granted the deduction. Therefore, reassessment made to withdraw deduction under section 80P by treating interest income as “income from other sources” instead of “business income”was nothing but change of opinion and On mere change of opinion, concluded assessment could not be reopened.Accordingly reassessment was set aside.

Reassessment - Change of opinion - Assessment completed granting deduction under section 80P - Reopening to withdraw deduction

Original assessment was framed under section 143(3) assessing total income at Nil. Subsequently, on examination of financial statement filed before the assessing officer, it was found that assessee had earned interest income of Rs. 6 lakhs on fixed deposit parked with Nationalized Bank and had claimed as deduction under section. According to AO, this income should have been taxed as “income from other sources” under section 56. Hence, AO reopened assessment and made addition. Held: AO completed original assessment accepting the declared income and had examined the issue of deduction under section 80P and granted the deduction. Therefore, reassessment made to withdraw deduction under section 80P by treating interest income as “income from other sources” instead of “business income” was nothing but change of opinion and on mere change of opinion, concluded assessment could not be reopened. Accordingly, reassessment was set aside.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :



IN THE ITAT, BANGALORE BENCH

CHANDRA POOJARI, A.M.

Akshaya Souharda Credit Co-operative Ltd. v. ITO

ITA No. 2574/Bang/2019

13 March, 2020

Appellant by: Sandeep, CA

Respondent by: Ganesh R. Ghale, Standing Council for DR

ORDER

This appeal filed by the assessee is directed against the order of the Commissioner (Appeals) dated 31-10-2019. The relevant assessment year is 2014-2015.

2. The assessee has raised following grounds :--

1. That the order of the learned Commissioner (Appeals) in so far it is prejudicial to the interests of the appellant is bad and erroneous in law and against the facts and circumstances of the case.

2. That the notice issued under section 148 is bad in law.

3. That the assessment made under section 147 is without jurisdiction and not valid.

4. That the learned Commissioner (Appeals) ought to have quashed the assessment proceedings made under section 147 as the assessment completed was not based on the reasons recorded.

5. That the learned Commissioner (Appeals) erred in law and on facts in disallowing 32,37,381 claimed as deduction under section 80P(2)(a)(i) of the Act on the ground that the appellant is not a Co-operative Society since it is registered under Karnataka Souharda Sahakari Act, 1997.

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