Siddhartha Nautiyal ORDER
Siddhartha Nautiyal, Member (J)
1. This appeal has been filed by the Revenue against the order passed by the Ld. Commissioner of Income Tax (Appeals)-IV, (in short "Ld. CIT(A)"), Baroda vide order dated 29.11.2012 passed for the Assessment Year 2005-06.
2. The Revenue has raised the following grounds of appeal:-
"1. On the facts and in the circumstances of the case, the learned CIT(A) erred in quashing the re-assessment proceedings initiated in pursuance of notice u/s 148 of the Act without appreciating the fact that as per provisions of section 292BB, the assessee shall be precluded from taking any objection in any proceedings or inquiry under this Act if the notice has been served upon him in time and in accordance with the provisions of the Income-tax Act, whereas, in the instant case, the assessee has not raised any such objection before the completion of the re-assessment proceedings.
2. On the facts and in the circumstances of the case, the learned CIT(A) erred in not appreciating the fact that it is not a case where the AO has completed the re- assessment after obtaining sanction u/s 151(1) from a lower authority than prescribed by the Act but sanction has been obtained by the AO from a higher authority then prescribed by the Act.
3. On the facts and in the circumstances of the case, the learned CIT(A) ought to have upheld the order of the Assessing Officer.
4. The appellant craves leave to add to, amend or alter the above grounds as may be deemed necessary."
3. The brief facts of the case are that the original assessment order was passed under Section 144 of the Act on 24.12.2008 in which certain additions amounting to Rs. 8,81,120/- were made by the Assessing Officer.
4. In appeal, Ld. CIT(A) allowed relief to the assessee to the extent of Rs. 8,26,820/-. Thereafter, the Assessing Officer re-opened the case of the assessee under Section 147 of the Act after recording the following reasons:-
"In the instant case, order u/s.144 of the IT Act, 1961 was passed on 24/12/2007. While passing this order, remuneration and interest amounting to Rs.1,83,200 and Rs.1,87,537/- respectively claimed by the assessee has been allowed which was otherwise not allowable to the assessee in view of the provisions of section 184(5) of the IT Act.
Therefore, the undersigned has reason to believe that the income chargeable to tax to has escaped assessment within the meaning of Section 147 of the IT Act, 1961."
5. In the 147 proceedings, the Assessing Officer was of the view that as per the provisions of Section 184(5) of the Act, no remuneration and interest paid by the assessee to its partners was allowable while computing the income chargeable under the head of income from business. The Assessing Officer observed that on verification, it has been noticed that while making assessment under Section 144 of the Act, the Assessing Officer allowed deduction of Rs. 1,87,537/- and Rs. 1,83,200/- on account of interest and remuneration, which was incorrectly allowed keeping in view the provisions of Section 184(5) of the Act. Accordingly, the Assessing Officer added the aforesaid amount of Rs. 4,29,737/- under Section 184(5) of the ........