TMI Blog2015 (1) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... mprehensive letter dt. 18th Nov., 2009 making a full disclosure of facts - AO specifically discussed in the course of the assessment order the matters in respect of which he has made a disallowance either fully or in part - Since the AO did not find any justification to reject the claim of the assessee in respect of the issue of CDC, there was no specific discussion in the course of order. Merely because subsequently another decision of the Coordinate Bench of the ITAT is noticed by the AO, that will not vests the jurisdiction in the AO to exercise his powers u/s. 147 of the Act - the AO was not justified at all on the facts of this case to initiate the proceedings u/s. 147 and issued the notice u/s. 148 of the Act – thus, the proceedings initiated by the AO u/s 147 is set aside – Decided in favour of assessee. - ITA No. 06/PN/2014 - - - Dated:- 24-12-2014 - Shri G. S. Pannu And Shri R. S. Padvekar,JJ. For the Petitioner : Shri Rajesh Damor For the Respondent : Shri Nikhil Pathak ORDER Per R. S. Padvekar, JM:- This appeal is filed by the assessee challenging the impugned order of the Ld. CIT(A)-I, Pune dated 30-09-2013 for the A.Y. 2007-08. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ange in US $ 72,71,287/- has been realized within due dates, as per Bank Realization Certificates. As regards direct export the equivalent value in US-$ 37,83,592/- has been realized within due dates, as per Bank Realization Certificates. Copies of bills, shipping bills and airway bills are furnished by assessee. 3. In sum and substance in the scrutiny assessment, the Assessing Officer allowed the claimed of the assessee. Subsequently, the Assessing Officer initiated proceedings u/s. 147 of the Act and issued notice u/s. 148 to the assessee. The reasons given by the Assessing Officer for issuing the notice u/s. 148 are as under: In this case company is a 100% export oriented unit and registered as such with SEEPZ SEZ and is holding a Green Card which is valid up to 31/03/2010. During the course of assessment proceedings the A.O. allowed deduction u/s. 10B in the order u/s. 143(3) dated 31/12/2009 at ₹ 66,07,760/- on total export turnover of ₹ 48,83,05,735/- after excluding freight insurance. The deduction u/s. 10B has been claimed on direct exports of ₹ 17,06,02,280/- and exports made to another EOU viz. Magna Casting Machine Works Pvt. Ltd. of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sequently another decision of the ITAT, Bangalore in the case of Tata Elxi Ltd. Vs. ACIT dated 16-10-2007 was noticed having different view on the matter there was no reason to initiate the action against the assessee. It was also pleaded that in the case of CIT Vs. Kelvinator of India Ltd. 320 ITR 561 (SC) the Hon'ble Supreme Court has held that on mere change of the opinion completed assessment cannot be reopened. The plea of the assessee did not find favour before the Ld. CIT(A). Now, the assessee has challenged the proceedings initiated by the Assessing Officer u/s. 147 of the Act. 5. We have heard the parties and perused the record. On the identical set of facts the issue had come for consideration before the Tribunal in the case of one of the group concern of the assessee company, more particularly in the case of Magna Casting and Machine Works Pvt. Ltd., Pune Vs. Assistant Commissioner of Income Tax, Circle- 11(2), Pune ITA No. 1175/PN/2013 order dated 21-11-2014. In the said case also the reasons recorded by the Assessing Officer for issuing the notice u/s. 148 are verbatim as in the case of the present assessee. Moreover, in the said case also the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Sec. 147 for withdrawing the legitimate deduction. On perusal of the reasons recorded by the Assessing Officer there is no quarrel in respect of the fact that while completing the assessment there was a decision of the ITAT, Ahmedabad which was considered by the Assessing Officer in the case of Anita Synthetics (P) Ltd. (supra). It appears that there was also contrary decision by the ITAT, Bangalore in the case of Tata Elxsi Ltd. (supra). The only reason for initiating the proceedings u/s. 147 is that there were two contrary decisions, one is in favour of the assessee and another is against the assessee and the decision which is against the assessee was not aware of the same while framing assessment u/s. 143(3) of the Act. 9. The relevant part of Sec. 147 of the Act reads as under: 147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment8 for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recomp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this would then certainly amount to review of an order which is not permitted unless so specified in a statue. The order dated 14.11.2011 disposing of the Petitioner s objection to initiation of proceedings under Section 147 of the said Act also proceeds on the view that there has been non application of mind during the original proceedings for assessment. This is unsustainable and as held this court in Asian Paints Ltd. v. Dy. C.I.T. 308 ITR 195 a fresh application of mind by the Assessing officer on the same set of facts amounts to a change of opinion and does not warrant reopening. In fact our court followed the Full Bench decision of the Delhi High Court in the matter of Kelvinator (supra) wherein it has been held as under: We also cannot accept the submission of Mr. Jolly to the effect that only because in the assessment order, detailed reasons have not been recorded an analysis of the materials on the record by itself may justify the Assessing Officer to initiate a proceeding under Section 147 of the Act. The said submission is fallacious. An order of assessment5 can be passed either in terms of sub section (1)of section 143 or subsection (3) of section 143. When a regular o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO has no power to review, but his power is a power to reassess. If a mere change of opinion cannot furnish a ground for reopening of an assessment, then, under the garb of reopening an assessment, a review would not equally be permissible. Consequently, the test is that there should be tangible material to come to a conclusion that there is an escapement of income from assessment. 13. These principles have been emphasized in the judgment of the Supreme Court in CIT vs. Kelvinator of India Ltd. (2010) 228 CTR (SC) 488 : (2010) 34 DTR (SC) 49 : (2010) 320 ITR 561 (SC). The Supreme Court has observed as follows : 6. ........... Therefore, post 1st April, 1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words 'reason to believe' failing which, we are afraid, s. 147 would give arbitrary powers to the AO 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 conceptual difference between power to review and power to reassess. The AO has no power to review; he has the power to reassess. But reassessment has to be based on fulfilment of ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment proceedings for a subsequent year certain additional information is obtained by the Revenue which was not available to it in the course of an assessment for an earlier year, that may legitimately be utilized as a ground for reopening an assessment of the earlier year. Where the reopening has taken place within four years that may legitimately give rise to an inference of escapement of income. The new information which has come to the knowledge of the Revenue would, therefore, constitute tangible material. 16. The judgment of the Division Bench of this Court in Multiscreen Media (P) Ltd. vs. Union of India (2010) 38 DTR (Bom) 14 : (2010) 324 ITR 54 (Bom) adverts to a decision of the Supreme Court in Ess Kay Engineering Co. (P) Ltd. vs. CIT (2001) 166 CTR (SC) 396 : (2001) 247 ITR 818 (SC) as laying down the principle that merely because the case of the assessee was accepted as correct in the original assessment for the assessment year in question that would not preclude the AO to reopen an assessment of an earlier year on the basis of a finding of fact made on the basis of fresh material in the course of an assessment for a subsequent assessment year. This Court in its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justify the reopening of the assessment for asst. yr. 2006-07. In order to establish that the reopening of the assessment for asst. yr. 2006-07 is not a mere change of opinion, the Revenue must demonstrate before the Court that during the course of the assessment proceedings for the subsequent year i.e. asst. yr. 2007-08 some new information or material had been brought on record which was not available when the assessment order was passed for asst. yr. 2006-07. That indeed is not the case of the Revenue. All material which was relevant to the determination was available when the assessment was completed for asst. yr. 2006-07. Consequently, the mere formation of another view in the course of assessment proceedings for asst. yr. 2007-08 would not justify the Revenue in reopening the assessment for asst. yr. 2006-07 though the reopening of the assessment has taken place within a period of four years. The power to reopen assessments is structured by law. The guiding principles which have been laid down by the Supreme Court in Kelvinator (supra) must be fulfilled. In the present case there was no tangible material, no new information and no fresh material which came before the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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