Shanti Prime Publication Pvt. Ltd.
Section 74, 147, 148 of Income Tax Act, 1961— Reassessment— If the very basis for reopening assessment does not survive, orders on such re-opening would not survive too.
Facts: Assessment of the assessee was reopened and in the reasons recorded, respondent No.1 acknowledged that the application filed by AICFL before the AAR was the principal source of tangible information coming to his possession on the basis of which he had formed the belief that income chargeable to tax had escaped assessment in the case of the petitioner.
Held, that in the reasons recorded by respondent No.1 it was precisely on the ground of change of status that the claim of the assessee i.e., the petitioner was found to be not acceptable which led to formation of the belief that income of the petitioner chargeable to tax had escaped assessment for the assessment year 2011-12. Therefore, the very foundation for formation of such belief is erroneous, which has been contradicted by this Court. In other words, after the judgment of this Court in AICFL, the very basis for re-opening the assessment no longer survived. This position is buttressed in the draft assessment order dated 06.05.2019 passed by respondent No.1 for the assessment year 2011-12 under Section 143(3) read with Sections 147 and 144-C(1) of the Act. In the said order passed on reassessment it was clearly held that the old trust fund and the new LLC fund are separate legal entities for the purpose of the Act. Therefore, loss of the old trust fund could not be carried forward by the new LLC fund. It is trite that if the Assessing Officer had no jurisdiction to initiate reassessment proceeding, the mere fact that subsequent orders have been passed would not render the challenge to jurisdiction infructuous. If the very basis for reopening assessment does not survive, orders on such re-opening would not survive too. - ABERDEEN ASIA PACIFIC INCLUDING JAPAN EQUITY FUND V/s DEPUTY CIT -  26 ITCD Online 070 (BOM)