TMI Blog2020 (1) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... ilure on the part of the assessee. Therefore, we are of the considered opinion that Assessing Officer was not justified in initiating reassessment proceedings. See M/S. SCHWING STETTER INDIA P. LTD. [ 2015 (6) TMI 497 - MADRAS HIGH COURT] - Decided in favour of assessee. - I.T.A. No.922/CHNY/2019 - - - Dated:- 9-1-2020 - Shri N.R.S. Ganesan, Judicial Member And Shri Inturi Rama Rao, Accountant Member For the Appellant : Shri. M. Karunakaran, Adv. For the Respondent : Shri. AR.V. Sreenivasan, JCIT. ORDER PER INTURI RAMA RAO, ACCOUNTANT MEMBER This is an appeal filed by the Revenue directed against the order of the Commissioner of Income Tax (Appeals)-13, Chennai ( CIT(A) for short) dated 14.12.2018 for the Assessment Year (AY) 2011-12. 2. The Revenue raised the following grounds of appeal: 1.The order of the learned CIT(A) is contrary to facts and circumstances of the case. 2.The learned CIT(A) erred in holding that the reopening of the assessment is not legally valid and thereby deleting the disallowance of ₹ 60,10,655/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an opinion that income escaped assessment to tax. There is no allegation by the Assessing Officer that assessee had failed to disclose all material facts necessary for the purpose of making assessment and accordingly held that reassessment proceedings were invalid in law. 5. Being aggrieved, the Revenue is in appeal before us in the present appeal. Ld. Departmental Representative submitted that the ld. Commissioner of Income Tax (Appeals) ought not have squashed the reassessment proceedings as the assessee failed to disclose factum of non compliance with TDS provisions on dyeing expenses. 6. On the other hand, the ld. Authorised Representative submitted that reassessment proceedings is based on material already available on record and there was no fresh tangible material brought on record suggesting escapement of income to tax. He further submitted that there is no failure on the part of the assessee to disclose all material facts necessary for the purpose of assessment and he also placed reliance on the judgment of Hon ble Jurisdictional High Court in the case of CIT vs. Schwing Shetter India P. Ltd, (2015) 122 DTR 289. 7. We heard the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perusal of the assessment order shows that the Assessing Officer had not mentioned that there are materials for escapement of income. The Assessing Officer also did not record any reason that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. 14. We find from the order of the Commissioner of Income Tax (Appeals) and the Tribunal and also on facts as has been culled out from the assessment order in question that there is no element of failure to disclose fully and truly all material facts necessary for assessment. 15. The reliance placed by the learned Standing Counsel appearing for the Revenue on Explanation (1) to Section 147 of the Income Tax Act cannot be pressed into service by the Department in the instant case, because the details of such claim has been revealed in the Tax Audit Report and apparently, the same has been considered by the Assessing Officer at the time of passing an order under Section 143(3) of the Income Tax Act. Therefore, Explanation (1) does not get attracted to this case. Explanation (2)(c)(i) and (iii) to Section 147 of the Income Tax Act, which is sough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment, provided there is tangible material to come to a conclusion that there was an escapement of income from assessment. For better appreciation, the relevant portion of the said decision reads as follows: 6. On going through the changes, quoted above, made to section 147 of the Act, we find that, prior to the Direct Tax Laws (Amendment) Act, 1987, reopening could be done under the above two conditions and fulfilment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act (with effect from 1st April, 1989), they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post- 1st April, 1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words reason to believe failing which, we are afraid, section 147 would give arbitrary powers to the Assessing Officer to reopen assessments on the basis of mere change of opinion , which cannot be per se reason to reopen. We must als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (emphasis supplied) 18. Similar view has been taken by this Court in the decision reported in [2009] 309 ITR 110 (Mad) COMMISSIONER OF INCOME-TAX v. CHOLAMANDALAM INVESTMENT AND FINANCE CO. LTD. , wherein it was held as follows: In those circumstances, it could not be regarded that the assessee had failed to disclose fully and truly all material facts relevant for the assessment. As the facts revealed that the Assessing Officer who made the original assessment order has called for all the details regarding the case where 100 per cent. depreciation were claimed and the assessee had furnished the invoices for purchase of assets on which 100 per cent. depreciation were claimed, there was no failure on the part of the assessee and if at all there was any failure, according to the Commissioner of Income-tax (Appeals), it was on the part of the Assessing Officer, who made the original assessment without going behind the nature of the transactions accepting the details furnished by the assessee. The Tribunal also extracted that portion of the order and found on the fact that there was no fault on the part of the assessee so as to enable the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isclose the material facts necessary for the assessment. Whenever a notice is issued by the Assessing Officer beyond a period of four years from the end of the relevant assessment year, such notice being issued without recording the reasons for his belief that income escaped assessment, it cannot be presumed in law that there is also a failure on the part of the assessee to file the returns referred to in the proviso or a failure to fully and truly disclose the material facts. The reasons referred to in the main paragraph of section 147 would, in cases where the proviso is attracted, include reasons referred to in the proviso and it is necessary for the Assessing Officer to record that any one or all the circumstances referred to in the proviso existed before the issue of notice under section 147. After an assessment has been made, in the normal circumstances, there would be no reason for anyone to doubt that the assessment has been made on the basis of all relevant facts. If the Assessing Officer chooses to entertain the belief that the assessment has been made in the background of the assessee s failure to disclose truly and fully all material fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20. In the case of ICICI Securities Ltd. V. Assistant Commissioner of Income Tax 3(2), Mumbai, the Bombay High Court vide order dated 22.08.2006 in W.P.No.1919 of 2006, while dealing with the issue on the reopening of assessment, held as follows: 7. In the facts of the present case, there is nothing new which has come to the notice of the revenue. The accounts had been furnished by the Petitioner when called upon. Thereafter the assessment was completed under section 143(3) of the Income Tax Act. Now, on a mere relook, the officer has come to the conclusion that the income has escaped assessment and he is of course justified in his analysis. In our view, this is not something which is permissible under the proviso to section 147 of the Income Tax Act which speaks about a failure on the part of the assessee to make a proper return. In the present case, no such case is made out on the record. 8. In the circumstances, we allow this petition in terms of prayer (a) and quash and set aside the notice dated 27th March 2006 directing reopening of the assessment for the year 1999-2000. 21. The above-said view of the Bomba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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