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2021 (7) TMI 348 - DELHI HIGH COURTReopening of assessment u/s 147 - whether the respondent can continue with the impugned proceedings based on the same material which was examined and qua which opinion was rendered by the AO while passing the draft assessment orders? - Is the respondent be permitted to assess the petitioners’ income chargeable to tax, which, according to the respondent, had escaped assessment in the facts and circumstances obtaining in the instant cases? - HELD THAT:- AO has no power to carry out an assessment based on a mere change of opinion on the same set of facts and materials which was available on record. The AO’s power under Section 147 of the Act does not extend to carry out the review of the material that was always available on record, and by this route conclude that the assessee’s income chargeable to tax has escaped assessment. [See Commissioner of Income-tax, Delhi vs. Kelvinator of India Ltd.,[2010 (1) TMI 11 - SUPREME COURT] Grant of approval under Section 151 for issuance of notice under Section 148 - Given this backdrop, the ACIT while giving approval under Section 148 of the Act, ought to have applied his mind, to the crucial question as to whether any new or fresh facts had come to the notice of the AO for triggering the provisions of Section 147/148 of the Act. The ACIT, on the other hand, mechanically replicated the language of the provision [i.e., Section 151 of the Act] by making the aforesaid endorsement in both cases - Given this backdrop, the ACIT while giving approval under Section 148 of the Act, ought to have applied his mind, to the crucial question as to whether any new or fresh facts had come to the notice of the AO for triggering the provisions of Section 147/148 of the Act. The ACIT, on the other hand, mechanically replicated the language of the provision [i.e., Section 151 of the Act] by making the aforesaid endorsement in both cases - See SYNFONIA TRADELINKS PVT. LTD. VERSUS INCOME TAX OFFICER, WARD-22 (4) [2021 (3) TMI 1177 - DELHI HIGH COURT] The argument advanced on behalf of the respondent, that the petitioners should be relegated to an alternate remedy cannot be sustained as the errors committed in the instant cases go to the root of the respondent's jurisdiction. As noticed above, the stand taken that Explanation 2(b) appended to Section 147 of the Act would come to the aid of the respondent is completely misconceived given the fact that, in instant cases, the proceedings under the said provision have been undertaken based on a review of the material which was already available on record. Undoubtedly, the respondent was attempting to regurgitate old facts by taking recourse to the provisions of Section 147/148 of the Act, which, according to us, is not permissible. The failure to arrive at a logical conclusion in a Section 144C proceeding cannot become the ruse for initiating the proceedings under Section 147/148 of the Act in the absence of new material emerging before the AO which gives the AO reason to believe that assessee's income chargeable to tax had escaped assessment. - Decided in favour of assessee.
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