CIT Vs Kohinoor Foods Ltd

Whether invocation of revisional powers by the CIT without holding an independent inquiry to repudiate the conclusions arrived at by the AO in the assessment order, is erroneous – YES: HC

– Revenue’s appeals dismissed: DELHI HIGH COURT

Whether invocation of revisional powers by the CIT without holding an independent inquiry to repudiate the conclusions arrived at by the AO in the assessment order, is erroneous – YES: HC

++ in the present case, the AO examined the assessee”s production record and books of account. The ITAT noted that the nature of the business “remains the same as in the past” as does, “the method of accounting production”. It was noted that assessee had “duly furnished the details of opening stock, closing stock and sales and production. It cannot therefore be said that this was a case of no inquiry by the AO. Added to this is the fact that the CIT has himself not undertaken any independent inquiry to contradict the conclusions reached by the AO and to demonstrate that the order of the AO was erroneous and prejudicial to the interest of the revenue;

++ also, turning to the period prior to the relevant AYs, the case of the assessee were reopened. The writ petitions filed by the assessee challenging the re-opening was allowed by the High Court. Therefore, since the issue in the previous and subsequent years stands adjudicated in assessee’s favour by the ITAT and this Court, it would be futile to reopen the issue only for three relevant. It is no longer a “live issue”. For a number of AYs from 1997-1998 till 2014-15, barring the three AYs in question, the issues have been decided ultimately in favour of the Assessee. In each of these AYs it was a scrutiny assessment under Section 143 (3). Surely, the rule of consistency would apply in such a scenario. There is no reason why only for the three AYs in question, should be reopened.

ITA No. 757/2005