TMI Blog2011 (5) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... ter, notice under Section 147 of the Act dated 18th September, 2006, was issued seeking to reopen the assessment stating that the Assessing Officer had Reasons to Believe that the income had escaped assessment within the meaning of Explanation 2 C(i) and (iv) of Section 147 of the Act. In the notice dated 18th September, 2006 following reasons were given:- It has come to notice that there is no manufacturing activity. However, on plant building, dies and moulds, wages, job work, repair maintenance has been claimed even though there was no production during the year. Thus, according to the Assessing Officer, though there was no manufacturing activity during the previous year, still the assessee had claimed depreciation on plant, machinery, factory, dies and moulds etc. The assessee had also claimed expenses on power and fuel charges, job charges and raw material, even though there was no production during the year. The assessee filed objection against the reopening which was repelled by the AO vide orders dated 7th November, 2007. Thereafter, the AO passed assessment orders dated 12th November, 2007 as per which expenses of Rs.67,14,144/- and depreciation of Rs.32,15,385/- was di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer had passed the original assessment order after scrutiny, then he was of the considered opinion that reopening had been resorted to by the officer on account of change of opinion. Since notice for reopening of the assessment was quashed, the CIT (A) did not go into the merits of the expenses and depreciation disallowed by the AO. 14. The Revenue, obviously, felt aggrieved by this order and, therefore, approached the higher authority namely the ITAT by way of second appeal. However, it has not succeeded in the said attempt as its appeal had been dismissed by the Tribunal vide impugned decision dated 5th February, 2010 affirming the view of the CIT (A) that resort to Section 147/148 was unwarranted as it constituted a change of opinion since the material acted upon had been made available alongwith the return of income. 5. Still dissatisfied, present appeal is preferred by the Revenue under Section 260A of the Act in which following questions of law are proposed. 1.Whether learned ITAT erred in holding that assumption of jurisdiction by the Assessing Officer under Section 147/148 was non-est and invalid. 2. Whether the notice under Section 148 issued by Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment of this Court in Rakesh Agarwal Vs. Assistant Commissioner of Income-Tax,221 ITR 492 wherein it was held as under:- It is true that in Calcutta Discount Ltd. v. ITO [1961]41ITR191(SC), the locus classicus on the subject, the Supreme Court did hold that the obligation of the assessed is to disclose only primary facts and not inferential facts. Primary facts are those which are material in that if taken into account, they would have an adverse effect on the assessed for assessment on greater income than what has been actually assessed. What facts are material and necessary for assessment differ from case to case. Would mere filing of these documents amount to disclosure of primary facts is the question ? Indeed, the answer is given in the dissenting portion of the judgment by Hidayatullah J. (as his Lordship then was) in Calcutta Discount Co.'s case [1961]41ITR191(SC) saying that if some material for the assessment lay embedded in the evidence which the revenue could have uncovered but did not, then, it is the duty of the assessed to bring it to notice of the assessing authority because the assessed knows all the material and relevant facts-the assessing authority might ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before the Assessing Officer that will determine the question. For instance, if material evidence is not writ large on the document but is embedded in come voluminous records/books of account requiring a careful scrutiny and delving deep into it to notice the necessary material, it is quite possible that having regard to the nature of the documents, material evidence cannot be discovered form such records despite due diligence and the case would attract application of Explanation 2 to hold that mere production of the books of account or the documents, etc., without pointing out the relevant entries therein, does not amount to disclosure within the meaning of section 147(a) of the Act. 8. We are unable to persuade ourselves with the aforesaid submission of learned counsel for the Revenue. Reading of the original assessment order dated 30th September, 2004 brings out following aspects:- (i) This was an order passed under Section 143 (3) of the Act (ii) The assessment order specifically notices that the return accompanied by statutory audit report in Form 3CD. (iii) The case was taken up for scrutiny. First notice under Section 143 (2) was issued on 13.10.2003 and du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of these facts which were available on record and when the original order passed by the AO reveals that there was an application of mind on the issue, there is no reason to presume that the AO would not have noticed the said material produced before him. On the aforesaid material and facts, the Tribunal has rightly concluded that it was a case of mere change of opinion and in the process observed as under:- It is not in dispute that originally, an assessment was completed by the Assessing Officer u/s 143 (3) of the Act. During the course of the assessment proceedings, certain queries were raised by the Assessing Officer, which were duly replied to by the assessee and, thereafter, the Assessing Officer completed the assessment u/s 143(3) of the Act. The Assessing Officer, thereafter, issued a notice u/s 148 on 18.09.2006 by entertaining a belief that though there was no manufacturing activity during the previous year, the assessee had even claimed depreciation on plant and machinery etc. and has also claimed expenses on power and fuel, wages and job charges and raw material. The Assessing Officer had entertained a belief that income had escaped assessment by invoking ..... X X X X Extracts X X X X X X X X Extracts X X X X
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