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2013 (4) TMI 599 - HC - Income TaxReopening of assessment u/s 148 – reason to believe - assessee has made payment towards Voluntary Retired Scheme which was allowed as revenue expenditure. The CBDT has issued a Circular in which it has stated that any ex gratia amount which results in an enduring benefit to assessee should be treated as capital expenditure. In view of this, the said VRS payment is required to be disallowed as capital expenditure. Revenue therefore, reason to believe that the amount chargeable to tax has escaped assessment. Therefore, notice u/s. 148 is issued. Petitioner challenged the same in this court. Held that - In our opinion, the Assessing Officer could not have issued the impugned notice on the basis of C.B.D.T circular. In that view of the matter, the circular of C.B.D.T may be a trigger, on the basis of which, the Assessing Officer may himself be satisfied that income chargeable to tax in a given case had escaped assessment. Such a circular by itself, in our opinion, cannot be the tangible material required for Assessing Officer to hold a belief that income chargeable to tax had escaped assessment. The Apex Court in the case of CIT v. Kelvinator of India Ltd. [2010 (1) TMI 11 – SC] has held that even post amendment in section 147 of the Act with effect from 1.4.1989, the concept of change of opinion has not been given a go-by. Even after the amendment in section 147, the Assessing Officer must have some tangible material to hold a belief that income chargeable to tax had escaped assessment. Thus on the basis of some general observation and discussion on principles for treating an expenditure either revenue or capital in nature, the Assessing Officer cannot claim to have been in possession of tangible material to hold a belief that income chargeable to tax had escaped assessment. we are satisfied that in the present case, notice for reopening has been issued without jurisdiction. In the result, the petition is allowed.
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