TMI Blog2005 (6) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the circumstances of the case, the learned CIT(A) erred in directing the AO for charging interest under ss. 234A, Band 234D." 2. The brief facts of the case are that the assessee is a Development Officer of Life Insurance Corporation of India. He derives income by way of salary, incentive bonus, commission etc. The assessee filed the original return of income on 28th April, 1999 showing total income at Rs. 2,71,630 which was processed under s. 143(1)(a) vide intimation dt. 8th Sept., 1999. Later on, a notice under s. 148 dt. 29th Sept., 1999 was served on the assessee. In response to the above notice, another return of income was filed on 5th July, 2001 showing the same income as was originally returned. The assessment was completed vide order under s. 143(3) dt. 20th March, 2002 and the total income was assessed at Rs. 5,19,641 thereby adding additional conveyance allowance of Rs. 1,38,030 and incentive bonus after allowing 10 per cent of expenses at RS. 1,09,979. Against the aforesaid order, an appeal was filed before the learned CIT(A). The learned CIT(A) vide order dt. 4th Oct., 2002 annulled the order on the ground that the notice under s. 148 was issued without jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me had resulted in completion of assessment and acceptance of returned income and that issue of notice under s. 148 thereafter can be only a situation of change of opinion. Considering the above arguments of the assessee, the learned CIT(A) held as under: "I have considered the argument. It is found that notice under s. 143(2) was to be issued within one year. During that very period, the AO had formed an opinion that income had escaped assessment, but the AO committed a mistake. Instead of issuing notice under s. 143(2), the AO issued notice under s. 148. The timing of issuing notice under s. 148 was incorrect because if an assessment is otherwise open to action under s. 143(2), s. 148 cannot be resorted. This mistake was set right by the Hon'ble CIT(A) and reopening was annulled. Thus, from the facts, it is found that there had been consistently same opinion of the AO that income had escaped assessment. Never was any opinion of the AO that returned income was to be accepted. In view of the above, there is no change of opinion. Moreover decision on the same point against the assessee by Hon'ble High Court in two cases and dismissal of SLP by Hon'ble Supreme Court filed against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out obtaining the approval from Jt. CIT as per s. 151(1) of the IT Act. (3) It is also submitted that the AO issued fresh notice under s. 148 to circumvent and/or to defeat the effect of the appellate order passed by the CIT(A) dt. 4th Oct., 2002 annulling the reassessment. (4) The learned AO has wrongly inferred from the decision of the Hon'ble Supreme Court in the case of Shivraj Bhatia and B. Chinnaih wherein it was held that "....argument must be left open to be considered in an appropriate case where a question or questions in that regard have been referred" and hence, he submitted that the disputed matter was not adjudicated by the Hon'ble Supreme Court and left open for appropriate cases. (5) Reasons recorded were communicated and it shows change of opinion because earlier 10 per cent was allowed as deduction from incentive bonus. (6) That in the original return filed on 28th April, 1999, all the material facts relating to computation of total income were disclosed by the assessee. (7) He submitted that the expenses were incurred for securing more business for LIC of India to earn incentive bonus and car was used for this purpose and, therefore, he prayed for delet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation dt. 8th Sept., 1999. Later on, a notice under s. 148 dt. 29th Sept., 1999 was served on the. assessee in response to which the assessee filed the return on 5th Jan., 2001 under protest showing total income at Rs. 2,71,630 as was originally filed. The AO has recorded the following reasons for issue of notice under s. 148 of the Act: "29th Sept., 1999. Return for income was filed by the assessee on 15th April, 1999 showing a total income of Rs. 2,71,630. This included incentive bonus of Rs. 3,66,594 out of which Rs. 1.46,638 has been claimed as a deduction towards expenses. Since these expenses are not allowable (having regard to the decision of Hon'ble Supreme Court in Civil Appeal No. 7467, 7498 of 1995 in the case of B. Chinniah vs. CIT and Civil Appeal Nos. 5896, 5897 of 1998 in the case of Shivraj Bhatia vs. CIT and this gross incentive bonus is part of salary, I am of the opinion that income chargeable to tax has escaped assessment. In order to bring it to tax issue notice under s. 148. It is further noticed that deduction of conveyance allowance has been claimed in excess." The assessee objected to the initiation of reassessment proceedings by the AO in the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under s. 148 of the Act. The power conferred under s. 147 is no doubt very wide. But at the same time it cannot be stated to be a plenary power. The assumption of jurisdiction under s. 147 must be on existence of material before the authority. Sec. 147 does not confer power of review. Section also does (not) empower the authority to assume jurisdiction under s. 147 to circumvent and/or to defeat the effect of the appellate order. In this case, on the basis of same reasoning on which the earlier reassessment proceedings initiated by the learned AO and reassessment framed in consequence thereof was annulled by the CIT(A) vide his order dt. 4th Oct., 2002 on the ground that the notice under s. 148 was issued without jurisdiction, the AO issued another notice under s. 148 to reopen the annulled assessment. In the case of Anand Samrat Co. vs. ITO (2000) 163 CTR (AP) 314 : (1999) 240 ITR 852 (AP), it has been held as under: "that the proposed reassessment was in negation of the principles of finality of the decision of the Tribunal and the implied bar against the initiation of reassessment proceedings on the same set of facts twice over. It was not open to the AO to go on resorting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion or questions in that regard have been referred. It is also pertinent to note that the assessee claimed Rs. 1,46,638 being 40 per cent as expenses out of receipt of incentive bonus but only 10 per cent was allowed by the AO. In my considered view, mere fresh application of mind to the same set of facts or mere change of opinion does not confer jurisdiction under s. 147. There are several judicial pronouncements to support this view. In the case of Jindal Photo Films Ltd., it has been held that it is a case of mere change of opinion which does not provide jurisdiction to the AO to initiate proceedings under s. 147. In the case of Govinda Chaudhary Sons vs. ITO (1977) 109 ITR 370 (Ori), it has been held that it is not open to the AO to act under s. 147 on a mere change of opinion on the same set of facts and laws. In the case of ITO vs. Nawab Mir Barkat Ali Khan Bahadur 1974 CTR (SC) 273 : (1974) 97 ITR 239 (SC), it has been held that second thoughts on the same material does not warrant the initiation of reassessment proceedings. The decisions relied upon by the assessee's counsel also supports the case of the assessee in this regard. 17. In view of the above discussion, I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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