TMI Blog2010 (4) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... n 148 of the Act and the consequential reassessment order, framed under section 144 read with section 147 of the Act are hereby quashed and set aside - 184 of 2010 - - - Dated:- 12-4-2010 - MEHTA D. A., DEVANI H. N. MS., JJ. JUDGMENT D. A. Mehta J.- 1. Considering the scope of the controversy, the petition is taken up for final hearing and disposal today. Rule. Learned advocate appearing for the respondent is directed to waive service of rule. 2. This petition has been preferred challenging the validity of notice dated September 24, 2009, issued under section 148 of the Income-tax Act, 1961 ("the Act") (annexure A) as well as reassessment order dated December 21, 2009, framed under section 144 read with section 147 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner was that though the impugned notice has been issued within a period of four years from the end of the relevant year, yet the reasons recorded would indicate, when read in the context of the record of the original assessment proceedings, that the reassessment proceedings are based merely on a change of opinion without pointing out as to what is the escapement of income. 6. On behalf of respondent authority, reliance has been placed on the affidavit-in-reply, and it is submitted that for the assessment year 2006-07, an elaborate assessment order has been framed covering all the issues and on the basis of the same, the reasons were recorded on March 27, 2009, for reopening the assessment for the year under consideration, namely, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Buildcon Ltd., A'bad PAN-AABCH 2762C. In this case, the assessee has filed its return of income on December 20, 2005, declaring the total income of Rs. nil. Thereafter, the order under section 143(3) of the Income-tax Act was passed determining the income at Rs. nil on December 26, 2007. (2) Thereafter, it is observed that the assessee is engaged in the construction business ; followed the project completion method and accordingly did not prepare the profit and loss account. The expenses were to be accounted on the work completion basis as per clause E of Schedule 7 to the balance-sheet. The expense incurred on the project was, shown work-in-progress (WIP), in the balance-sheet. At the end of March 31, 2005, the construction work- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007, it becomes clear that in relation to the very issue which forms the basis of reasons recorded, a specific query was raised by the Assessing Officer and the petitioner had replied on December 24, 2007, in the following words : "(1) Accounting system adopted We are following the completion method for transferring work-in-progress to land and building account since we directly purchase materials and hire labours for development construction activity. We book the members on their interest basis irrespective of stage of work. We allot shares to them to part with ownership of land and building. We are not preparing any profit and loss account for our company in the period of construction as all the expenditure are debited to work-in-p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the Amending Act, 1989, to reintroduce the expression "reason to believe" in section 147 of the Act, the apex court has come to the conclusion that if the phrase "reason to believe" is omitted, the same would give arbitrary powers to the Assessing Officer to reopen the past assessment on mere change of opinion and this is not permissible even as per the legislative intent. 12. In the light of the facts noted hereinbefore, the ratio enunciated by the apex court in the aforesaid decision would apply with all force, as in the present case, the reasons recorded themselves indicate that the successor Assessing Officer has merely recorded a different opinion in relation to an issue to which the Assessing Officer, who had framed the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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