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TMI Blog2011 (3) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed certain reliefs to the assessee and after giving effect to the appellate order, the assessment order for the year under consideration was revised on a net loss of about Rs. 5.33 crores. Subsequently, after expiry of four years, on the basis of information available with the Department primarily based on the audit report, it surfaced that certain income chargeable to tax has escaped assessment for the assessment year under consideration and based on this, the Assessing Officer issued a notice dated 31.3.2004 under section 148 of the Act followed by another notice under section 143(2) read with section 148 of the Act dated 20.10.2004. Accordingly, reassessment proceedings were completed on a total income of Rs. 56,23,890. Simultaneously, penalty proceedings were also initiated against the assessee under section 271(1)(c) of the Act allegedly for furnishing inappropriate particulars of income and a penalty of Rs. 2.54 crore was imposed by the Assessing Officer. The assessee preferred an appeal before the CIT(A), Ghaziabad, who vide his order dated 19.10.2005 dismissed the appeal and confirmed the additions made by the Assessing Officer. The two main additions were - (i) excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion within the meaning under section 147 of the Act. Having regard to these discussions, we cancel the reassessment proceedings framed under section 148 of the Act. As we have cancelled the reassessment on the point of jurisdiction, we do not find it necessary to go into the merits of the case. Accordingly, appeal is allowed." 3. Against this order, the Revenue has come in appeal in ITA No. 1391/2009. 4. In the appellate penalty proceedings, CIT(A) vide its order dated 15.12.2006 following the order of quantum proceedings cancelled the penalty with reference to the first addition, viz., Rs. 3,89,33,833 in respect of excise duty but sustained the penalty with reference to the second addition, namely, Rs. 1,99,96,463 in respect of interest on capital borrowed for acquiring assets for business purpose. The CIT(A) while disposing of the two appeals, recorded as under: "..... After considering all the facts and circumstances of the case, as discussed above, in this case there is no element of mens rea pertaining to either concealment or furnishing of inaccurate. It is only the consistent view of the Department pertaining to treatment of excise duty payable, it has been looked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised in the audit report. Based on this audit report, a review was sought to be made by the Assessing Officer under the name of reassessment alleging escape of income in the assessment already concluded. With regard to the aforesaid two entries, the particulars were already available before the Assessing Officer. The assessee had made complete disclosure of the particulars before the Assessing Officer in the proceedings of assessment under section 143(3). 7. Reopening of assessment after four years was apparently not permissible. There is a catena of judgments with regard to the proposition of law that assessment cannot be reopened under section 147 of the Act merely on the basis of change of opinion beyond the period of four years when there was no fault on the part of the assessee to disclose, truly and completely the material particulars. Reference in this regard can be made to some of the judgments of our own High Court and that of Supreme Court. In CIT v. Goetze (India) Ltd. [2010] 229 CTR 167, reliance was placed on the judgment of CIT v. Kelvinator of India Ltd. [2002] 256 ITR 1/123 Taxman 433 (Delhi) (SB), a judgment of our High Court wherein it was specifically observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntire material had been placed by the assessee before the Assessing Officer at the time when the original assessment was made and the Assessing Officer applied his 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 Assessing Officer 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. 10. In the case of CIT v. Batra Bhatta Co. [2008] 174 Taxman 444, another Division Bench of our High Court held as under:- "7. We feel that the observations of the Supreme Court in the aforesaid decision clearly apply to the case at hand. Merely because the Assessing Officer felt that the issue required 'much deeper scrutiny, is not ground enough for invoking section 147. It is not belief per se that is a pre-condition for invoking section 147 of the said Act but a belief founded on reasons. The expression used in section 147 is - "If the Assessing Officer has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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