M/s. Theo Desh Consultants v. DCIT, Circle-2(2), Baroda
[Citation -2016-LL-0930-131]
| Citation | 2016-LL-0930-131 |
|---|---|
| Appellant Name | M/s. Theo Desh Consultants |
| Respondent Name | DCIT, Circle-2(2), Baroda |
| Court | ITAT-Ahmedabad |
| Relevant Act | Income-tax |
| Date of Order | 30/09/2016 |
| Assessment Year | 2006-07 |
| Judgment | View Judgment |
| Keyword Tags | re-opening of assessment • audit objection • internal audit • audit party • tax effect |
| Bot Summary: | Reopening of case u/s 115WG due to audit objection is not justified in law and the case should not have been reassessed. Ld. Counsel for the assessee referred to the reasons recorded for re- opening of assessment in paragraph 2, which reads as under:- On verification of the records, it was noticed that the assessee has declared total income in respect of FBT at Rs. 2,33,616/-. The audit observed from the above it is evident that payment of FRF is in the nature of Fringe Benefit, thereby FBT of Rs.3,29,656/- remained to taken in to account of FBT. In view of above, the liability to FBT on the FRF is to be examined. Whether considered on the basis that the nature and scope of the functions of the internal audit organization of the Income-tax Department are co-extensive that that of receipt audit or on the basis of the provisions specifically detailing its functions in the Internal Audit Manual Vol.2, we hold that the opinion of an internal audit party of the Income-tax Department on a point of law cannot be regarded as information within the meaning of section 147(b) of the Income-tax Act, 1961. The question referred by the ITAT is answered in the negative, in favour of the assessee and against the Revenue, The assessee is entitled to one set of costs in these appeals. It clearly emerges from the record that the impugned FBT assessment was reopened u/s 115WG consequent to the opinion expressed by the Internal Audit party. Since the reopening itself is bad in law, there is no need to consider the merits of the issue and the assessee s appeal is accordingly allowed. |