TMI Blog2007 (4) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. 3. We have heard the rival submissions. The original assessment for the asst. yr. 1987-88 was completed on 23rd Dec., 1994. Later it was reopened under s. 147 and notice under s. 148 was issued on 23rd March, 1998. The return was tiled on 9th Nov., 1998. According to the AO the return should have been filed on or before 24th April, 1998. Because of the delay of seven months the return was treated as non est and the assessment was completed on 28th March, 2000 under s. 144 r/w s. 147 for non-filing of the return of income. 4. According to the AO originally the assessee did inflate the amount of agricultural income. The reasons for reopening of the assessment are contained in the AO's letter, dt. 19th Jan., 2000, which is reproduced be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... house and after taking into consideration the totality of the facts the estimate offered by the assessee was accepted. (ii) There was absolutely no fresh material to initiate the reassessment proceedings. (iii) Merely on the basis of change of opinion the case cannot be reopened. Reliance was placed on the decision of the Hon'ble jurisdictional High Court rendered in the case of CIT vs. Annamalai Finance Ltd. (2005) 197 CTR (Mad) 86 : (2005) 275 ITR 451 (Mad). In this case the Hon'ble High Court has held that s. 147 of the Act does not postulate conferment of power upon the AO to initiate reassessment proceedings upon a mere change of opinion. In the case of Apollo Hospitals Enterprises Ltd. vs. Asstt. CIT (2006) 206 CTR (Mad) 426 : (20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be construed to be fresh material. Since the area of cultivation was only 0.2 acre for grapes, the income estimated by the assessee was not correct. It was further contended that the earlier opinion formed by the AO was on the basis of false statements only. He believed the statement of the assessee. There was absolutely no other material to form a correct opinion. Reliance was placed on the decision of the Hon'ble Supreme Court rendered in the case of Sri Krishna (P) Ltd. Etc. vs. ITO Ors. (1996) 135 CTR (SC) 75 : (1996) 221 ITR 538 (SC). In this case the assessee had shown certain Hundi loans. The AO accepted the averment made in the assessment. During the assessment proceedings for the succeeding year the assessee again showed Hundi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of income escaping assessment. Such error becomes manifest in the light of information coming subsequently in the possession of the AO. Thus if the original assessment is legally correct and not vitiated by any error the case cannot be reopened. De hors any information a mere change of opinion by the AO would not entitle him to reopen an assessment. If the view adopted by the AO is a possible view it cannot be said that an error has crept into the order and as a result thereof income has escaped assessment. In the context of the facts of the present case we find that the AO adumbrated his opinion solely on the basis of the report given by the Horticultural Officer. This report was submitted to the Dy. Superintendent of Police, Vigilance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute. Reason to believe does not mean reason to suspect. The AO is not supposed to act like Sherlock Holmes. Once the assessment is final let Damocle's Sword be not hang over the head of the assessees for all times. Stale issues should not be reactivated. Having regard to the facts we are of the opinion that there was no omission on the part of the assessee in disclosing the agricultural income. The income was estimated and it was accepted after due enquiry. There was no material to justify the reassessment proceedings. In our opinion jurisdiction was assumed merely on account of change of opinion which is not possible. As such we are of the view that the reassessment proceedings are not valid. Accordingly we quash the same. 11. In vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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