Law:

Section:

Section 72A of the Income-tax Act, 1961 - Losses - Amalgamation/demerger, carry forward and set off of - Assessment year 2000-01 - Consequent to amalgamation, DHCL, a hospital, along with its unabsorbed depreciation, vested with assessee-hospital which availed of benefit of section 72A in respect of said unabsorbed depreciation - Subsequently, Assessing Officer, acting under section 147, withdrew set off availed by assessee - Whether since both, DHCL and assessee were only hospitals which are not brought into fold of 'industrial undertakings' by section 72A(7)(aa), neither DHCL nor assessee could be termed as an 'industrial undertaking', so as to make assessee eligible to claim benefit under section 72A - Held, yes - Whether, therefore, Assessing Officer was justified in withdrawing set off availed by assessee - Held, yes Section 147 of the Income-tax Act, 1961 - Income escaping assessment - Non-disclosure of primary facts - Whether on facts stated under heading 'Losses - Amalgamation/demerger, carry forward and set off of' since Assessing Officer had not at all discussed anything in original assessment order regarding set off under section 72A and furthermore, department had a reason to believe that set off was claimed and availed of on a wrong notion by assessee as hospital was not an 'industrial undertaking', Assessing Officer was justified in reopening assessment - Held, yes FACTS Consequent to the amalgamation, the DHCL, a hospital, vested with the assessee along with its unabsorbed depreciation as on 31-3-1999. For the relevant assessment year the assessee claimed the benefit of section 72A in respect of the said unabsorbed depreciation, which was allowed by the Assessing Officer. Subsequently, the Assessing Officer reopened the assessment under section 147, and held that the assessee was not entitled to the set off of it had availed. On writ, the Single Judge held that the department could not reopen the assessment by mere change of opinion or by drawing a different inference from the same facts as were available earlier. On appeal : HELD The entire reading of the original assessment order would show that the Assessing Officer had not at all discussed…

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