TMI Blog2014 (2) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... hout any new information or evidence to sustain a new belief it amounts to change of opinion - Decided against Revenue. - ITA No. 4923/Del/2012 - - - Dated:- 31-1-2014 - Shri R. P. Tolani And Shri S. V. Mehrotra,JJ. For the Appellant : Smt. Renuka Jain Gupta Sr. DR For the Respondent : Smt. Ranu Jain Shri V. Mohan CAs ORDER Per R. P. Tolani, J.M:- This is revenue s appeal against the order of CIT(A)-XII, New Delhi dated 01-06-2012 relating to A.Y. 2005-06. Following grounds are raised: 1. That on the facts of facts and circumstances of the case the ld. CIT(A) erred on facts and in law in quashing the reassessment under section 147/148 of the I.T. Act. That on the facts of facts and circumstances of the case the ld. CIT(A) erred both on facts and in law in deleting the addition under section 14A on account of proportionate management expenses amounting to Rs. 51,08,274/- 2. Brief facts are: The assessee company is engaged in the business of shares; securities and investment activities and is a member of National Stock Exchange. The assessee s return of income was first processed u/s 143(1) vide intimation dated 23-05-2006 and subsequently the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 55 (Del.); - Atma Ram Properties Pvt. Ltd. Vs. DCIT 343 ITR 141 (Del.) - BLB Ltd. Vs. ACIT 343 ITR 129 (Del.) 2.4. Ld. CIT(A) thus allowed the appeal of the assessee by following concluding observations: In view of the above facts and case laws cited above as well as the proviso to section 147 mentioned above the reassessment proceedings u/s 147/148 are herby quashed. Hence there is no need to go into the merit of the case Rahul Kumar Bajaj (Pune Bench) ITAT. Therefore, other grounds do not need any adjudication. 2.5. Aggrieved, revenue is before us. 3. Ld. DR relied on the order of assessing officer and contends that the assessing officer was fully justified in recourse to notice u/s 148 as the ITAT Mumbai Special Bench in the case of Daga Investments had held that Rule 8D is clarificatory in nature and therefore is applicable from retrospective effect. Merely because assessee produced books of a/cs it does not imply that assessee made full and true disclosure in the return of income. Reliance is placed on the Hon ble Supreme Court judgment in the case of Kalyanji Mawaji 102 ITR 287 and the Hon ble Supreme Court judgment in the case of Phool Chand Bajranglal 203 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and filed details which were verified. After considering the details filed, assessment is completed at the returned income of s. 2,36,34,790/-. Issue necessary forms. 4.2. The volume of evidence in respect of questionnaire, assessee s replies and enclosures clearly demonstrate that the issue about mutual fund income, sources, books of accounts and expenditure were duly verified, examined and considered in original assessment. 4.3. Thereafter, in reply to notice u/s 148, the assessee submitted as under: The assessee company while furnishing the return of income u/s 139(1) of the Act for A.Y. 2005-06 vide acknowledgement no. 9100000321 dated 24-10-2005 had already fully disclosed all the material facts necessary for assessment. However, in case the Department ahs come across any information which has led to believe that income has escaped assessment, the reasons and the specific information forming the said belief may please be communicated in writing and copy of the material/ documents, if any, be supplied to the assessee company for taking further necessary action in the matter. 4.4. The assessing officer, however, rejected the same by following observations: Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter the assessment u/s 143(3) was passed allowing the claim of expenditure. Thus the issue about consideration of provisions of sec. 14A are clearly inbuilt in the proceedings. (ii) In the reasons recorded by the assessing officer there is no whisper about the fact that the assessee has failed to provide full and true particulars of its income necessary for assessment. In the absence of such specific intention, the extended time of six years is not applicable to assessee s case. Reliance is placed on Hon ble Delhi High Court judgment in the case of Haryana Acrylic Manufacturing Co. Vs. CIT Anr. (2009) 308 ITR 38 (Del.), which has specifically held that unless the escapement of income arises due to the failure on the part of the assessee to disclose fully and truly all material facts, necessary for his assessment, then no action u/s 147 can be taken after four years from the end of the relevant assessment year. Thus, the CIT(A) was perfectly justified in applying the Hon ble Delhi High Court judgment in the case of CIT Vs. Purolator India Ltd. (supra) for holding the reassessment to be bad in law and on facts in these circumstances. (iii) It is further pleaded that all the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the return under Section 143(1) without scrutiny, and nothing more. This is nothing but a review of the earlier proceedings and an abuse of power by the AO both strongly deprecated by the Supreme Court in CIT vs. Kelvinator (supra). The reasons recorded by the AO in the present case do confirm apprehension about the harm that a less strict interpretation of the words "reason to believe" vis-a-vis an intimation issued under section 143(1) can cause to the tax regime. There is no whisper in the reasons recorded, of any tangible material which came to the possession of the assessing officer subsequent to the issue of the intimation. It reflects an arbitrary exercise of the power conferred under section 147 - substantial question of law answered in favour of the assessee." 4.7. Further reliance is placed on following decisions: - Sh. Gopi G. Nambiar Vs. JCIT 2013 (11) TMI 567 ITAT Del. - DCIT Vs. Binani Industries Ltd. 2013 (11) TMI 1323 ITAT Kolkata - ITA no. 2933, 2935/Del/201 ITA no. 1763/Del/2012 dated 26-11- 2013. 4.8. In view thereof it is pleaded that the order of CIT(A) is fully justified and conforms to the mandate of Hon ble Delhi High Court and the Hon ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here was no allegation in the reasons recorded about the assessee having not furnished any true and full particulars of his income (iii) The action u/s 148 was taken on the same set of facts and evidence on record, without any new information or evidence to sustain a new belief it amounts to change of opinion. We find no merit in the case laws cited by the ld. DR i.e. Kalyanji Mawaji Phool Chand Bajranglal (supra) as the sufficiency of reasons is not in question at all before us. The crucial question is whether assessing officer was eligible to initiate this action within the time limit beyond 4 years and whether the reasons recorded amounted to change of opinion. Therefore, the case laws cited by ld. DR are of no help to the revenue. In our considered view CIT(A) has rightly taken a correct view which is further fortified by Hon ble Delhi High Court judgment in the case of Orient Craft Ltd. (supra); Jai Hotels Co. Ltd. Vs. ADIT 184 Taxman 1; and Haryana Acrylic Manufacturing Co. (supra). 5.4. In view thereof we find no infirmity in the order of CIT(A) holding 148 proceedings to be bad in law. In view thereof we uphold the order of CIT(A). 6. In the result, Revenue s appeal i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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