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TMI Blog2014 (2) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner/assessee is a Hindu Undivided Family, represented by its karta Mohan Gupta. The assessee filed its return of income for the A.Y. 2005-06 declaring net income of Rs. 16,98,732/-. This return was processed under Section 143(1) of the Act. Subsequently, on 26.03.2012, the Revenue issued a notice under Section 148 of the Act for reopening the assessment for A.Y. 2005-06. On 02.04.2012, the assessee filed a return of income pursuant to that notice dated 26.03.2012, requesting a copy of the reasons recorded by the Assessing Officer for reopening the assessment. These reasons were supplied on 18.04.2012, and the assessee preferred objections on 26.04.2012. These were rejected by the Revenue on 09.08.2012. A further exchange of objecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to be issued within the meaning of sec 147 ofthe ITAct, 1961." 4. The assessment order under Section 143(3) of the Act for the A.Y. 2007-08, from which the reassessment arose, after considering in detail the nature and frequency of the sale and purchase of shares by the assessee concluded that the activity was not for the purposes of investment but in the nature of a business activity, and thus, chargeable as such. The fact that such income was considered to be STGC in previous years was considered insufficient by the Assessing Officer as it is "a settled law that intimation under Section 143(1) are summary processing wherein there is no application of mind." The assessee appealed this order (Appeal No. 114/09-10). The CIT (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nclusion arrived at by the Income-tax Officer and examine whether there was any material available on the record from which the requisite belief could be formed by the Income-tax Officer and further whether that material had any rational connection or a live link for the formation of the requisite belief......................." 7. Thus, while the Court will not judge the adequacy of the reasons provided by the Assessing Officer, the Court must assess whether the belief is based on relevant and specific information that could lead to such a belief. This well-accepted principle has found acceptance in ITO, Calcutta and Ors. v. Lakhmani Mewal Das 1976 (103) ITR 437 (SC); Central Provinces Manganese Ore. Co. Ltd. v. Income Tax Officer, Nagpur, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elieve" failing which, we are afraid, Section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of "mere change of opinion", which cannot be per se reason to re-open. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to re-assess. But reassessment has to be based on fulfillment of certain precondition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rstood in a liberal manner where the finality of an intimation under Section 143(1) is sought to be disturbed is erroneous and misconceived. As pointed out earlier, there is no warrant for such an assumption because of the language employed in Section 147; it makes no distinction between an order passed under section 143(3) and the intimation issued under section 143(1). Therefore it is not permissible to adopt different standards while interpreting the words "reason to believe" vis-à-vis Section 143(1) and Section 143(3). We are unable to appreciate what permits the Revenue to assume that somehow the same rigorous standards which are applicable in the interpretation of the expression when it is applied to the reopening of an assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to point out that where an "intimation" is issued under section 143(1) there is no opportunity to the assessing authority to form an opinion and therefore when its finality is sought to be disturbed by issuing a notice under section 148, the proceedings cannot be challenged on the ground of "change of opinion". It was not opined by the Supreme Court that the strict requirements of section 147 can be compromised. On the contrary, from the observations (quoted by us earlier) it would appear clear that the court reiterated that "so long as the ingredients of section 147 are fulfilled" an intimation issued under section 143(1) can be subjected to proceedings for reopening. The court also emphasised that the only requirement for disturbing the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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