TMI Blog2014 (2) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income Tax Act issued by Revenue on 26.04.1995 in respect of the Assessment Year 1991-92. 2. It is urged that in respect of the above Assessment year, the petitioner/assessee had filed its return on 31.12.1991. During the pendency of the assessment proceedings, the assessee s premises were subjected to search on 13.10.1992. In the light of the materials found by the Income Tax Authorities, a questionnaire was addressed to the assessee on 21.05.1993. Reliance is placed by the assessee/petitioner upon various proceedings of the Income Tax Authorities in respect of Assessment Year (AY) 1991-1992, specially the order sheets made after 21.05.1993. It is argued that the nature of queries sought in response to its reply do illustrate and clearly brings out that the Revenue wishes information with respect to a host of matters including deposits made by four concerns i.e. M/s. Maha Shveta Traders Ltd., M/s. Remico Testiles (P) Ltd., M/s. Marvex Enterprises (P) Ltd. and M/s. Prabhat Enterprises (P) Ltd. The Revenue had also put to the Managing Director of the assessee/petitioner during the course of assessment proceedings for the AY 1991-92, an affidavit of one Sanjay Dadhich. After co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no authority vested with any other person who could legally stop the operation of bank account of the company by Sh. Sanjay Dadhich. As I have already informed the banks of M/s. Ralson (India) Ltd. i.e. P.N. B., Dhandari Kalan, Ludhiana has not responded to the notices given by Sh. Sanjay Dadhich through his advocate to the Manager, Punjab National Bank and appears to have given no reply in a circumlocutory manner. In fact it was M/s. Ralson (India) Ltd. Account who ultimately benefitted from these F.D.Rs. as it had availed of overdraft facility in account No. 722A and the payments were also received by its persons in fictitious names. It has been also informed by Inv. Circle 2(1) that one of the recipient of the payment encashed against bearer cheques is Mr. Murli and this fact is established for the documents seized from the residence of its Managing Director, Sh.Sanjeev Pahwa. It has been further informed that the various facts gathered in the course of investigation clearly established the direct involvement of M/s. Ralson (India) Ltd. in the purchases of M/s. Panacea Drugs and Pharmaceuticals, a sick industrial unit, when Sh. Pahwa, the Managing Director of Ralson (Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income Tax Authorities sought details of the accounts which the assessee had with 8 named individuals besides several concerns including the four i.e. M/s. Maha Shveta Traders Ltd., M/s. Remico Testiles (P) Ltd., M/s. Marvex Enterprises (P) Ltd. and M/s. Prabhat Enterprises (P) Ltd. Likewise the list of the FDRs seized from the residence of one R.P. Mahajan, apparently belonging to the company and other materials as well as the details of cash, stock etc. the total of which worked out to be Rs.7,95,97,739.10 were also sought. Counsel for the petitioner urged that, after taking into account these explanations given in writing and after affording opportunity of hearing, the original Assessment Order was framed on 29.09.1993. Counsel emphasises that no new material was found and that the re-assessment was sought to be conducted only on the basis of an apparent impermissible ground. Learned counsel for the petitioner relied upon the decision of the Supreme Court reported in Commissioner of Income Tax Vs. Kelvinator of India Limited [2010] 320 ITR 561. It is argued that once certain material is considered by the Assessing Officer in respect of which an enquiry has been made, mere fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the event it is held by reason of Section 147, if the Income Tax Officer exercises its jurisdiction for initiating proceedings for re-assessment only upon a mere change of opinion, the same may be held unconstitutional. 9. The Revenue s appeal to the Supreme Court was unsuccessful. The Full Bench s opinion was confirmed and reiterated in Kelvinator s case (supra). The Court held that: therefore, post 01.04.1989 power to reopen is much wider. However, one needs to give a schematic interpretation to the words reasons to believe failing which, we are afraid, Section 147 would give arbitrary powers to the Assessing Officer to reopen assessments on the basis of mere change of opinion which cannot be per se reason to reopen. We must also keep in mind the difference between power to review and power to re-assess. The Assessing Officer has no power to review, he has the power to reassess. But reassessment has to be based on fulfilment of certain pre-conditions and if the concept of change of opinion is removed, as contended on behalf of the Department, the, in the garb of reopening the assessment renew would take place. One must treat the concept of change of opinion as a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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