TMI Blog2012 (8) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... certain as to under which section he should proceed while framing the assessment u/s. 147. Further, no tangible material has been brought on record, the AO has simply disallowed the claim of write off on the facts and circumstances which were available before him while framing the original assessment. This approach clearly show that the AO has merely changed his opinion in relation to the allowability of the said write off. Moreover, it cannot be said that assessment proceedings were completed as the order passed u/s. 154 is also an order which can be subject to appeal and revision and as the proceedings are not been completed on record, it cannot be said that any income has escaped assessment. Hence, assessment order passed u/s. 147 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The assessee filed a detailed reply. We restrict our concern to the reply for Q.19. The assessee filed a chart of details of bad debts. Item No. 1 relates to the facts under consideration by which the assessee furnished the name and address of LA Cream Finance ltd. Amount outstanding is Rs. 1,35,00,000/-, year of debit 2000-01 A/c head loan given . The reply was considered by the AO and the assessment was completed by making disallowance for Education expenditure, Vehicle expenses and depreciation. The assessed income was computed at Rs. 1,12,87,910/- by order dt. 12.12.2007. 5. On 24.11.2009, the AO issued and served upon the assessee notice u/s. 154 of the Act by which the AO sought to rectify the assessment order dt. 12.12.2007. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Association. The write off of this loan of Rs. 1,35,00,000/- is duly covered by provisions of Section 36(vii) r.w.s 36(2) of the Act. However, this submission of the assessee did not find favour with the AO who was of the opinion that this write off of loan of Rs. 1,35,00,000/- is in contravention of provisions of Sec. 36(2) disallowed the claim of the assessee and completed the reassessment proceedings u/s. 143(3) r.w.s. 147 of the Act. 6. Before the Ld. CIT(A) the assessee questioned the validity of the issue of notice u/s. 148 and asked the CIT(A) to quash the order passed u/s. 143(3) r.w.s 147 of the Act. In alternative, the assessee also argued that the amount of Rs. 1,35,00,000/- was given in the ordinary course of business and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mahinder Freight Carriers VS CIT 129 ITD 278 wherein the assessment made u/s. 148 after the issue of notice u/s. 154 on similar reasons has been quashed by the Tribunal. 8. The Ld. Departmental Representative strongly supported the orders of lower authority and submitted that this is not a case of change of opinion as the AO sought details vide questionnaire with notice u/s. 142(1) and the reply filed by the assessee did not match with the query . The reply of the assessee was not in the line of the detail sought by the AO. Therefore, the AO had reasonable and valid reasons for reopening the assessment. 9. We have heard the rival contentions and have perused the orders of lower authorities. We find that at the time of original assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reopen an assessment does not stand obliterated after the substitution of section 147 of the Income-tax Act, 1961, by the Direct Tax Laws (Amendment) Acts, 1987 and 1989. After the amendment, the Assessing Officer has to have reason to believe that income has escaped assessment, but this does not imply that the Assessing Officer can reopen an assessment on mere change of opinion. The concept of "change of opinion" must be treated as an inbuilt test to check the abuse of power. Hence after April 1, 1989, the Assessing Officer has power to reopen an assessment, provided there is "tangible material" to come to the conclusion that there was escapement of income from assessment. Reason must have a link with the formation of the belief. 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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