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TMI Blog2014 (8) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the explanations, framed the assessment on 28-03- 2008. In this background of circumstances, the respondent AO sought to re-open the assessment by the impugned notice, under Section 147 of the Act. Responding to this notice, the assessee, on 22-04-2013 stated that it stood by the returns filed originally (and accepted by the AO on 28-03-2008); it also requested that the reasons for re-opening the assessment be furnished. 3. The Revenue acceded to the petitioner's request; the reasons furnished are extracted below: "In this case assessment was completed under section 143(3) vide order dated 28.3.2008 on an income of Rs. 1, 12,760/-. 2. On perusal of the records and the details filed by the assessee it came to the notice that the assessee has added an amount of Rs. 25,31,003/- to its capital account of his proprietorship concern M/s Madhukar Khosla & Co. (Rs.14,31,000/- as gift and Rs. 11,00,003/- addition). During the course of assessment proceedings the assessee offered no explanation to the above addition to the capital account. 3. In the absence of the source of the addition with documentary evidence on records, the same is required to be brought on tax net as per provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment was completed under Section 143 (3) after notice was issued under Section 142 (1) was issued and explanation sought in respect of all relevant matters. The assessee could not be faulted for the omission to discuss the materials on record. Learned counsel stressed that "reasons" were to be on the basis of "tangible materials" which must be in possession of the revenue, which alone can result in a valid re-opening. There was no such tangible material; the AO, argued counsel, acted without any jurisdiction in merely seeking to revisit the matter, which in effect amounts to a review or an impermissible change of opinion. Learned counsel relied on CIT, Delhi v. Kelvinator of India Ltd., (2010) 2 SCC 723 and CIT-V v. Orient Craft Ltd., [2013] 354 ITR 536 (Delhi). 7. Learned counsel for the Revenue supports the re-opening of assessment in this case and urges that the Court should dismiss the petition. It was submitted that there was no explanation how the assessee added the amount to the capital account. The original assessment shows that the AO did not direct his mind to the issue at all though a questionnaire might have been issued. He relied on the decision in CIT-VI v Us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng is initiated under Section 148. This reassessment is clearly not on the basis of new (or "tangible") information or facts that which the Revenue came by. It is in effect a re-appreciation or review of the facts that were provided along with the original return filed by the assesse. The Supreme Court in Kelvinator (supra) frowned against such exercise of power:- "However, one needs to give a schematic interpretation to the words "reason to believe" 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 reassess. But re-assessment has to be based on fulfillment of certain pre-condition 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. Hen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e intimations were issued earlier under Section 143(1)may well lead to such an unintended mischief. It would be discriminatory too. An interpretation that leads to absurd results or mischief is to be eschewed. 13. Certain observations made in the decision of Rajesh Jhaveri (supra) are sought to be relied upon by the revenue to point out the difference between an "assessment" and an "intimation". The context in which those observations were made has to be kept in mind. They were made 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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