TMI Blog2007 (9) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... pinion on the same set of facts. 3. In any view of the matter and in any case, learned CIT(A) has erred in law and on facts in confirming the action of learned AO in reopening the assessment and in any case, impugned reassessment was void ab initio." 3. The facts concerning this matter are as under: 3.1 The assessee was deriving income from export of readymade garments and trading of fabrics as also interest from partnership firm. The assessee filed return of income on 2nd Dec., 1996 declaring total income at nil. The return was processed under s. 143(1)(a) on 4th Dec., 1996. Subsequently, the case was selected for scrutiny and a notice under s. 143(2) Was issued. The assessee had claimed deduction under s. 80HHC to the tune of Rs. 9,84,062. The AO completed the assessment under s. 143(3) on 18th March, 1999. 3.2 Thereafter, a notice under s. 148 was issued by the AO on 28th March, 2001. A copy of this notice has been filed on p. 6 of the paper book. The assessee submitted reply to this notice vide letter dt. 10th May, 2001. From the record made available to us it is not known as to whether the notice issued under s. 148 on 28th March, 2001 was dropped or withdrawn or not. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in appeal proceedings (apparently dt. 2nd June, 2004) the assessee has contended that 'notice under s. 148 dt. 31st March, 2003 is void as the proceedings already initiated vide notice under s. 148 dt. 28th March, 2001 were pending on the date of fresh intimation.' If such was the case the appellant would have pointed out before the AO. However, no such plea was raised before the AO. In the order under appeal the assessment was completed on basis of action taken under s. 148 on 31st March, 2003. The original assessment under s. 143(3) in the case was completed on 18th March, 1999. Therefore, the notice issued under s. 148 was within four years from the end of the year, in which the original assessment was completed and was within the time specified in the main provision of s. 147 and as such was valid. Therefore, this contention of the appellant is also rejected." 4. Before us, the learned counsel for the assessee submitted that since earlier notice issued under s. 148 on 28th March, 2001 was not withdrawn or proceedings were not dropped, the proceedings continued on the basis of the said notice and therefore reopening of assessment during the time when proceedings were already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee to disclose fully and truly all material facts necessary for completion of assessment. It was submitted by the learned counsel that in this case the assessee has disclosed all material facts and therefore the reopening after four years was not legally justified. In support of his contention the learned counsel has placed reliance on various authorities including the decisions in the cases of CIT vs. Kelvinator of India Ltd. (2002) 174 CTR (Del)(FB) 617 : (2002) 256 ITR 1 (Del)(FB); Asstt. CIT vs. Vindhya Telelinks Ltd. (2007) 107 TTJ (Jab)(TM) 149; Jindal Photo Films Ltd. vs. Dy. CIT Anr. (1999) 154 CTR (Del) 355 : (1998) 234 ITR 170 (Del); and CIT vs. Foramer France (2003) 185 CTR (SC) 512 : (2003) 264 ITR 566 (SC). He also placed reliance on the order of Tribunal, Pune Bench "A", dt. 9th June, 2006 rendered in ITA Nos. 503 to 505/Pn/2003 in the case of Ahmednagar Forgings Ltd. vs. Asstt. CIT; and the order of Tribunal, Delhi Bench 'F', dt. 11th Aug., 2006 rendered in ITA Nos. 1211 1212/Del/2004 in the case of C.P. Kukreja Associates (P) Ltd. vs. Dy. CIT. In the latter decision the Tribunal has considered the decision of the Hon'ble Delhi High Court in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R (Del) 84 : (2005) 274 ITR 186 (Del), the Hon'ble Delhi High Court has observed as under: "Held, allowing the petition, that from the original assessment orders as well as the order made by the appellate authority, it was clear that the AO was well aware of the primary facts, namely, the claim made by the assessee, the circumstances under which the claim was made and the provisions of law which could be applied while granting the benefits. A decision may be right or wrong but that was none of the concern of the subsequent officer. If the primary facts were not available or there was concealment or there was no application of mind at all, then a case of reopening the assessment could be made out. But, when all the facts were placed before the AO and the AO consciously considered the facts and arrived at a decision, then it could not be reopened merely because subsequently he changes his mind. or some other officer takes a different view. Hence, this was a case of wrongful assumption of jurisdiction and as such the notices, the speaking orders and the assessment orders made in pursuance of the notices were quashed." 8.3 The ratio of the decision is fully applicable to the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 8.6 On the controversy relating to failure on the part of the assessee to make disclosure of facts, application of mind by the AO and non-expression of opinion on the relevant point by the AO as well as on the issue relating to change of opinion, we may make reference to a latest decision of Hon'ble Delhi High Court rendered in the case of CIT vs. Eicher Ltd., ITA No. 309/Del/2006, dt. 22nd May, 2007. In that case the assessment was completed under s. 143(3) on 7th Dec, 1995 and subsequently, the AO reopened the assessment by issuing the notice dt. 30th March, 2000 under s. 148. The reason for reopening the assessment was to tax the waiver of interest allegedly not offered to tax by the assessee. On receipt of the notice, it was contended by the assessee that the reopening was based on the change of opinion and not because that the assessee had not fully and truly disclosed the material facts. In support of this contention, reference was made to letter dt. 8th Nov., 1995, wherein it was pointed out that the assessee had approached the banks and financial institutions for finance to pay interest arrears and principals upon which the banks agreed to the same and the principal an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is mind to that material and accepted the view canvassed by the assessee, then merely because he did not express this in the assessment order, that by itself would not give him a ground to conclude that income has escaped assessment and, therefore, the assessment needed to be reopened. On the other hand, if the AO did not apply his mind and committed a lapse, there is no reason why the assessee should be made to suffer the consequences of that lapse." 8.10 In view of the above latest authority the issue stands fully covered in favour of the assessee and following the said decision, we hold that in this case also the assessment has been made only on the basis of change of opinion. 8.11 In view of the above legal position the reassessment made in this case after the expiry of four years from the end of the relevant assessment year cannot be justified in law because the Department has not been able to bring out any material to show that there was any failure on the part of the assessee to disclose material facts truly and fully to the AO during the assessment proceedings. Thus, in view of the proviso to s. 147, the reopening of the assessment cannot be justified and consequently t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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