TMI Blog2011 (10) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. On 10 September 2009 a survey was conducted under Section 133A of the Income Tax Act 1961, in the course of proceedings for Assessment Year 2007-08. The Assessing Officer issued a notice on 29 March 2010 proposing to reopen the assessment for Assessment Year 2005-06. Before the Court it is not in dispute that a similar notice was issued on the same day, by which the assessment for Assessment Year 2006-07 was sought to be reopened on the ground that the income chargeable to tax had escaped assessment within the meaning of Section 147. On the request of the assessee, the reasons on the basis of which the assessment was sought to be reopened have been disclosed under a communication dated 8 April 2010. Those reasons are extracted herein below for convenience of reference: "In this case the assessment for the A.Y. 200506 was comp" leted on 31.12.2007 determining total income at Rs.14,12,92,170/. Subsequently a survey operation u/s. 133A of the Income Tax Act, 1961 was carried out at the business premises of the assessee on 10/09/2009. During the course of survey operation certain documents as per Annexure A1, and A2 were impounded. Also copies of books of account maintained i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial statements attached with the return of income; vii) Receipts as per impounded books of account are not verifiable with reference to financial statements attached with the return of income; viii) Provisions of section of Rule 9A and 9B are to be invoked. Since the assessee has failed to disclose fully and truly all the material facts necessary for assessments for A.Y. 2005-06, I have reason to believe that in this case above mentioned income/expenditure has escaped assessment. Therefore notice u/s. 148 is issued to reassess the income of the assessee for the A.Y. 2005-06." 3. The assessee has thereupon been directed to furnish documents, information and details, as the case may be, in order to enable the Assessing Officer to complete the reassessment in accordance with law. The assessee addressed a letter dated 7 July 2010 by which an attempt was made to provide a reconciliation of the impounded books of account and the disclosures made in the return of income. The Assessing Officer by an order dated 25 October 2010 has dealt with the objections of the assessee to the reopening of the assessment and has rejected those objections. 4. Counsel appearing on behal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust be in the affirmative and hence, no case for interference under Article 226 of the Constitution has been made out. 6. The reopening of the assessment in the present case is admittedly within a period of four years of the end of the relevant Assessment Years, 2005-06 and 2006-07. When the reopening takes place within a period of four years of the relevant Assessment Year, the powers of the Assessing Officer are substantially wider than when a reopening is beyond a period of four years. Nonetheless, the power to reopen an assessment cannot be exercised arbitrarily even within a period of four years, for the Income Tax Act, 1961 does not confer upon the Assessing Officer a power to review an assessment once made. A mere change of opinion cannot justify reopening of assessment, but where the Assessing Officer can demonstrate that there was tangible material on the basis of which he had formed the belief that income had escaped assessment, that would furnish jurisdiction to him to reopen assessment. The law on the subject has been formulated in the judgment of the Supreme Court in Commissioner of Income Tax v. Kelvinator of India Ltd. (2010) 320 ITR 561 (SC). thus: "Post 1st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by him, one cannot say that it constitutes change of opinion." 8. A Division Bench of the Madhya Pradesh High Court has in Dr. Lata Chouhan v. Income Tax Officer (2010) 329 ITR 400. upheld the reopening of assessments on the basis of tangible material which comes in the possession of the department following a survey action under Section 133A. 9. In the present case, the Assessing Officer had tangible material on the basis of which he has formed a reason to believe that income has escaped assessment. The tangible material consists of material that came into the possession of the department following a survey operation which took place under Section 133A on 10 September 2009. During the course of the survey certain documents came to be impounded. The Assessing Officer noted that during the course of the proceedings for Assessment Year 2007-08 extracts of the books of account which were found in an impounded C.D. were taken for the period relevant to the Assessment Years to which these proceedings relate. These were verified with the financial statements filed with the return of income. Discrepancies have been revealed in respect of three heads in particular : (i) Differe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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