TMI Blog2014 (8) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... led the AO to believe that full disclosure had not been made - The notice of the AO’s order rejecting the objections, and the arguments of the Revenue nowhere indicate how the AO was impelled to seek re-opening of the assessee’s case – the reassessment notice cannot be sustained – Decided in favour of Assessee. - W. P. (C) No. 1320/2014, C. M. No. 2744/2014 & 2745/2014 - - - Dated:- 14-8-2014 - S. Ravindra Bhat And Vibhu Bakhru,JJ. For the Petitioner : Shri Salil Kapoor with Shri Vikas Jain and Shri Varun Gupta For the Respondents : Shri Sanjeev Sabharwal, Sr. Standing Counsel with Shri Ruchir Bhatia, Jr. Standing Counsel JUDGMENT Mr. Justice S. Ravindra Bhat C.M. NO. 2745/2014 ( for exemption) Allowed, subject to all just exceptions. W.P.(C) 1320/2014, C.M. NO.2744/2014 1. The petitioner challenges the notice dated 25.03.2013 under Section 148 of the Income Tax Act ( the Act ) proposing to re-open the assessment for Assessment Year 2006-07 @ ₹ 1,12,760/- completed under Section 143 (3) by the Assessing Officer ( AO ). 2. The brief facts are that the petitioner filed income tax returns on 30.10.2006 for AY 2006-07. The returns were select ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that: there is no new information with your good self which was not available earlier. It is only on the basis of earlier existing Information and details that your good self has been forming an opinion that it is a case of escapement of income. Under the facts, it is a clear cut case of change of opinion. Section 147, cannot be resorted to in case of change of opinion 5. By the letter dated 20-12-2013, the assessee s objections to the reopening of assessment were rejected; the AO in his letter, stated as follows: you have raised the issue that section 147 has been resorted to due to a change of opinion. It may be reiterated that the issues on which the case has been reopened, had not been discussed earlier. Thus the issue of change of opinion does not arise. The onus was upon the assessee to provide full and complete details during the earlier proceedings which he failed to do so and therefore Section 147 is being resorted to. It is for the A.O to draw inferences from the facts and apply the law determining the liability of the assessee. If there are sufficient reasons to believe that income has escaped assessment, then it is the discretion of the A.O to reopen the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer and Anr. [1993] 203 ITR 456 (SC) The Supreme Court held that the scope of enquiry to decide whether there were reasons to believe was restricted, and To that limited extent, the court may look into the conclusion arrived at by the Income-tax Officer and examine whether there was any material available on the record from which the requisite belief could be formed by the Income-tax Officer and further whether that material had any rational connection or a live link for the formation of the requisite belief. This was based on the law declared in several previous decisions of the Court (Central Provinces Manganese Ore. Co. Ltd. v. Income Tax Officer, Nagpur, [1991] 191 ITR 662 (SC), Sri Krishna Pvt. Ltd. v. Income Tax Officer, Calcutta, (1996) 9 SCC 534). 9. In this case, the reasons provided under Section 148 are that in absence of the source of the addition with documentary evidence on records, the same is required to be brought on tax net as per provisions of section 68 of the Income tax Act, 1961 as the assessee had offered no explanation about the nature and source of the said additions and thus, must be treated as income which escaped assessment. No details are pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 143(1). Therefore it is not permissible to adopt different standards while interpreting the words reason to believe vis- -vis Section 143(1) and Section 143(3). We are unable to appreciate what permits the Revenue to assume that somehow the same rigorous standards which are applicable in the interpretation of the expression when it is applied to the reopening of an assessment earlier made under Section 143(3) cannot apply where only an intimation was issued earlier under Section 143(1). It would in effect place an assessee in whose case the return was processed under Section 143(1) in a more vulnerable position than an assessee in whose case there was a full-fledged scrutiny assessment made under Section 143(3). Whether the return is put to scrutiny or is accepted without demur is not a matter which is within the control of assessee; he has no choice in the matter. The other consequence, which is somewhat graver, would be that the entire rigorous procedure involved in reopening an assessment and the burden of proving valid reasons to believe could be circumvented by first accepting the return under Section 143(1) and thereafter issue notices to reopen the assessment. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 147 it should play by the rules of that section and cannot bog down. In other words, the expression reason to believe cannot have two different standards or sets of meaning, one applicable where the assessment was earlier made under section 143(3) and another applicable where an intimation was earlier issued under section 143(1). It follows that it is open to the assessee to contend that notwithstanding that the argument of change of opinion is not available to him, it would still be open to him to contest the reopening on the ground that there was either no reason to believe or that the alleged reason to believe is not relevant for the formation of the belief that income chargeable to tax has escaped assessment. In doing so, it is further open to the assessee to challenge the reasons recorded under section 148(2) on the ground that they do not meet the standards set in the various judicial pronouncements. 11. The foundation of the AO s jurisdiction and the raison d etre of a reassessment notice are the reasons to believe . Now this should have a relation or a link with an objective fact, in the form of information or facts external to the materials on the record. Suc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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