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TMI Blog2010 (5) TMI 688X X X X Extracts X X X X X X X X Extracts X X X X ..... e proviso to section 147, especially when there was regular assessment under section 143(3) and the notice under section 148 was issued beyond the period of 4 years from the end of the relevant assessment year. 3. The learned Commissioner of Income-tax (Appeals) erred in fact and in law in confirming action of the Assessing Officer in reopening the assessment on the basis of change of opinion relying on the papers already filed with the return of income and available at the time of regular assessment under section 143(3) of the Act. 4. The learned Commissioner of Income-tax (Appeals) erred in fact and in law in confirming action of the Assessing Officer in disallowing the claim of bad debt under section 36(1)(vii) of Rs. 11,03,569 despite the fact that all the conditions mentioned in the said section were fulfilled." 2. We have heard the learned representatives of both parties, perused the findings of the authorities below and considered the material available on record. 3. The assessee is in the business of manufacturing and sale of pesticides. The return of income was filed on October 24, 2001 declaring therein total income of Rs. 2,78,767. The original assessment under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the proviso to section 147 of the Income-tax Act is not complied with in this case. It was submitted that the assessee has furnished return under section 139(1) of the Income-tax Act and disclosed all particular of income. Therefore, there is no failure on the part of the assessee to disclose the correct income. It was submitted that the Assessing Officer reopened the assessment merely on change of opinion which is bad in law. The assessee relied upon several decisions in support of his contention. It was further submitted that details of claim of bad debt was filed before the Assessing Officer and the assessee has already offered the sales as income in the earlier year and the Assessing Officer has originally allowed claim of the assessee for bad debt. It was submitted that after the amendment it would be sufficient compliance of section 36(1)(vii) of the Income-tax Act if the amount has been written off as irrecoverable in the accounts of the assessee. The assessee relied upon the orders of the Income-tax Appellate Tribunal, Special Bench in the case of Dy. CIT v. Oman International Bank Saog [2006] 100 ITD 285 (Mum.) and ITO v. Anil H. Rastogi [2003] 86 ITD 193 (Mum.) (TM) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer and the learned Commissioner of Income-tax (Appeals) on the reopening of the assessment and submitted that reopening is justified in the matter because there was chances of recovery of the debts. Therefore, the Assessing Officer rightly reopened the matter because auditor had objection. The learned Departmental representative however, on merit conceded that the issue is now covered in favour of the assessee by the judgment of the hon'ble Supreme Court in the case of T. R. F. Ltd. ( supra) . 7. We have considered the rival submissions and perused the material available on record. The hon'ble Full Bench of the Delhi High Court in the case of CIT v. Kelvinator of India Ltd. [2002] 256 ITR 1 by following Circular No. 549 of the Central Board of Direct Taxes held that on mere change of opinion of the Assessing Officer cannot be a ground for reassessment and that amendment of section 147 with effect from April 1, 1989 has not altered the position. The hon'ble Gujarat High Court in the case of Garden Silk Mills (P.) Ltd. v. Dy. CIT [1999] 237 ITR 668 held that (headnote) "however wide the scope of taking action under section 148 of the Income-tax Act, it does not confer the jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated February 27, 2004. It is, therefore, clear that all the facts were all along within the knowledge of the Assessing Officer at the time of framing the original assessment. The return of income was filed on October 24, 2001 and original assessment has been framed on February 27, 2004 under section 143(3) of the Income-tax Act. The first proviso to section 147 of the Income-tax Act provides "Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year." In this case, the assessee has disclosed all the particulars at the time of original assessment regarding bad debt. Therefore there was no failure on the part of the assessee to d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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