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TMI Blog2015 (5) TMI 872X X X X Extracts X X X X X X X X Extracts X X X X ..... n 147 of the Act, on the basis of which, the reassessment notice was issued, whereby the reasons were recorded for reopening the assessment. 3. The main submission raised by the Learned Senior Counsel for the petitioner, in the cases pertaining to assessment years 2005-06 & 2006-07, is that once there was no finding recorded by the Assessing Officer (its acronym, 'AO') that the petitioner had not disclosed fully and truly all the material facts and a period of 4 years had expired from the end of the relevant assessment year, reopening could not be done on account of change of opinion, which had led to the notices being issued. In CWP No.6767 of 2013, the challenge was on the ground that since it was only a change of opinion, the same was not permissible on account of the foundation being illegal and the jurisdiction of this Court was, thus, being invoked. 4. As per the pleadings, the return of income under Section 139(1) of the Act was filed on 28.10.2005 and the assessment order was passed on 28.11.2007, under Section 143(3) of the Act. The case of the Bank was that along with the return of income, it had filed its balance-sheet, profit and loss account, cash flow statem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of depreciation claimed and only allowing depreciation @ 15% on the ATM by treating the same as plant and machinery. Accordingly, noticing that the position was similar for the concerned assessment years 2005-06 and since the 251 ATMs had been operationalised by March, 2005 and by holding that there was reason to believe that the income of the assessee, chargeable to tax, had escaped assessment, notice was issued for the years in question. 8. Counsel for the petitioner has, thus, submitted that the said notices were liable to be quashed along with the impugned order dated 25.03.2013, whereby the objections had been dismissed as it was only a change of opinion, being recorded by the AO by submitting that the Bombay High Court in Commissioner of Income Tax-1 Vs. M/s Saraswat Infotech Ltd. (in ITA(L) No.1243 of 2012) decided on 15.01.2013 (Annexue P10), has held against the Revenue on the said issue. Reliance has also been placed upon the judgment of the Income Tax Appellate Tribunal, New Delhi Bench, to contend that ATMs are computerized telecommunications and therefore, the depreciation was rightly claimed @ 60%. Similar reliance has also been placed upon the decision of the ITAT, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961. Date: 27.03.2012 Sd/- (Dr.Raman Garg) Asstt. Commissioner of Income-tax, Circle, Patiala" 11. A perusal of the above would go on to show that when the returns for the subsequent years were processed, the AO had disallowed the claim made @ 60% and added a sum of Rs. 3,71,00,000/- to the income of the assessee-Bank, by allowing depreciation @ 15% only, by treating the ATMs as plant and machinery. Keeping in view the fact that the ATMs had been operationalised by March, 2005, reasons were recorded to believe that the income of the assessee, chargeable to tax, had escaped assessment. There is no disputing the fact that the assessment for the said years, i.e., 2005-06 and 2006-07, under Section 143(3) had concluded on 28.11.2007 and 30.11.2007 and determination of tax upon the assessee was made on the basis of the assessment. The proviso to Section 147 provides that no action shall be taken under the said section, after the expiry of 4 years from the end of the relevant assessment year unless any income chargeable to tax has escaped assessment, by reason of failure on the part of the assessee to make the return or respond to the notice issued under Section 142(1) or Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nning Mills Ltd. Vs. Commissioner of Income Tax & another [2004] 270 ITR 290, and the objections raised by the Revenue that the writ was not maintainable against the notice, was rejected. Relevant portion of the judgment reads as under: "11. A bare perusal of the above shows that the entire thrust of the observations recorded by the Assessing Officer is to justify his satisfaction about escapement of income. There is not even a whisper of an allegation that such escapement had occurred by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment. As held in Duli Chand Singhania's case, absence of this finding makes the action of the Assessing Officer wholly without jurisdiction. Since the illegality of notice under Section 148 of the Act is apparent from the reasons recorded for initiation of proceedings under Section 147 of the Act, it is a fit case for interference in the exercise of our writ jurisdiction. Sending the petitioner back to the Assessing Officer to raise these objections and requiring him to pass an order ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the additional factor regarding the change of opinion by the AO, would also be a valid ground for setting aside the notice issued for the assessment year 2007-08, which is discussed below. 16. In CWP No.6767 of 2013, pertaining to assessment year 2007-08, the writ petition is liable to be allowed, in view of the principle of law laid down by the Apex Court in Commissioner of Income Tax, Delhi Vs. Kelvinator of India Ltd. [2010] 320 ITR 561 wherein it has been held that jurisdiction could not be conferred on the basis of mere change of opinion and it could not be a reason per se to reopen assessments which had been finalised and change of opinion was not relevant ground for reason to believe for issuance of notice under Section 147. Relevant observations read as under: "4. On going through the changes, quoted above, made to Section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, re-opening could be done under above two conditions and fulfillment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Assessing Officer. It was pointed out that the meaning of the expression, Rs. reason to believe' had been explained in a number of court rulings in the past and was well settled and its omission from section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended section 147 to reintroduce the expression Rs. has reason to believe' in place of the words Rs. for reasons to be recorded by him in writing, is of the opinion'. Other provisions of the new section 147, however, remain the same." 5. For the aforestated reasons, we see no merit in these civil appeals filed by the Department, hence, dismissed with no order as to costs." 17. The reason for reopening, thus, being merely a change of opinion on account of the assessment being made for the subsequent years would not give the AO the jurisdiction to reopen as he would, thus, be reviewing his earlier decision which has been held not to be permissible. Thus, keeping in view the above, writ petitions are allowed and the notice dated 27.03.2012 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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