TMI Blog2015 (8) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the line of distinction between assessment made under section 143(1) and 143(3). Thus, the contention of the Ld. DR does not hold ground. A perusal of the original assessment orders passed under section 143(3) of the Act for the assessment years 2005-06 and 2006-07 shows that the Assessing Officer has clearly stated that the assessee has claimed deduction under Chapter VI-A of the Act. AO while drawing computation of total income has clearly mentioned, Income from windmill activity and has thereafter granted deduction under Chapter VI-A of the Act on windmill income. Once the Assessing Officer has applied his mind while passing the assessment order and has granted relief, there is no question of reviewing the same under the garb of reassessment proceedings. In the reasons for reopening nowhere it has been stated that the deduction claimed by the assessee under section 80-IA of the Act has come to the knowledge of the Assessing Officer after passing of assessment orders. In our considered view, it is clear case of change of opinion. Thus, AO has acted beyond his jurisdiction in initiating reassessment proceedings under section 147 of the Act. - Decided in favour of assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were subject to scrutiny assessment under section 143(3) of the Act. In the return of income filed for all the aforesaid assessment years, the assessee has claimed deduction under section 80-IA of the Act. Thereafter, on 20.03.2009 separate notices under section 148 of the Act were issued to the assessee in respect of all the impugned five assessment years. The Assessing Officer had given similar reasons for reopening of assessment in all the years. Assessment orders under section 143(3) r.w.s. 147 of the Act for all the impugned assessment years were passed on 25.11.2009. In reassessment proceedings the claim of deduction under section 80-IA was denied to the assessee. Aggrieved by the re-assessment orders, the assessee challenged the orders for respective assessment years in appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) vide order dated 03.03.2010 common for all the impugned assessment years rejected the contentions of the assessee challenging reopening proceedings as well as disallowing of deduction under section 80-IA of the Act. Against the order of First Appellate Authority, the assessee has come in second appeal before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and the action of the authorities below in initiating reassessment proceedings against the assessee. 7. We have heard the submissions made by the representatives of both the sides and have perused the orders of the authorities below. We have also examined the judgements and the documents filed by the assessee in the form of Paper Book. It is an undisputed fact that reassessment proceedings in respect of assessment years 2002-03 and 2003-04 have been initiated after the elapse of four years from the end of the relevant assessment year. Thus, the proviso to section 147(1) shall come into play. It is also an undisputed fact that in assessment year 2002-03, assessment was made under section 143(1). In other four impugned assessment years, assessment orders were passed under section 143(3) of the Act. The assessments in all the five years was reopened on the same date i.e. 20.03.2009. The Ld. AR has placed on record the reasons for reopening of the assessment in all the five years. The reasons given in assessment year 2002-03 are reproduced hereinbelow :- The assessee firm has claimed the deduction under section 80IA of IT Act of ₹ 11,79,686/- for the AY 2002-03 on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the part of the assessee to make a return of income under section 139 of the Act; or, (b) omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that year. The Hon'ble Delhi High Court in the case of CIT vs. Kelvinator of India Ltd. reported as 256 ITR 1 (Delhi) has held that the aforestated two conditions are precedent for invoking jurisdiction to reopen the assessment under section 147 of the Act. Both the conditions are cumulative, if any, of the said two conditions are not fulfilled, the notice issued by the Assessing Officer under section 148 of the Act is without jurisdiction. 9. The Hon'ble Delhi High Court in the case of E.I. Dupont India Pvt. Ltd. And Another vs. DCIT reported as 351 ITR 299 (Delhi) has held that failure to disclose all material facts necessary for assessment is a condition precedent for reopening of an assessment beyond a period of four years from the date of assessment. It is incumbent upon the Assessing Officer to demonstrate that there was failure on the part of the assessee to fully and truly disclose all material facts necessary for its assessment. If the reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue notices to reopen the assessment. An interpretation which makes a distinction between the meaning and content of the expression reason to believe in cases where assessments were framed earlier under section 143(3) and cases where mere 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars only on the ground that the claim of deduction under section 80HHC of the Act was not examined properly. The Hon'ble High Court held as under :- From the facts emerging on record, there is nothing to indicate that the petitioner has withheld any particulars. The successor-Assessing Officer has verified the same record to come to the conclusion that there is escape-ment of income which could have been done at the initial stage itself. There is nothing on record to indicate any omission on the part of the assessee in fulfilling any obligation in law. Whether the Assessing Officer while framing the original assessment had failed to work out the tax liability correctly or not, the assessee cannot be charged for any omission. In case the assessee had laid a claim to a particular amount, it was the job of the Assessing Officer to correctly compute the tax liability. Merely making a claim cannot be stated to be non-disclosure of material facts so as to vest in the Assessing Officer jurisdiction under section 147 of the Act. Besides, as already noted hereinabove, the respondent seeks to reopen the (sic) after a period of four years from the end of the relevant assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide. 13. Now, we proceed on to the assessment years 2004-05, 2005-06 and 2006-07. The reassessment proceedings can be initiated against the assessee if the Assessing Officer has 'reason to believe' that any income chargeable to tax has escaped assessment for any assessment year. For reopening the assessment within a period of four years from the end of the relevant assessment years, the test to be applied is whether there is a tangible material to do so. The Assessing Officer before invoking the jurisdiction under section 147 must have in his possession any tangible and/or fresh material which was not considered by him at the time of making assessment. The legislature has not granted unfettered powers to the Assessing Officer to reviews the order in the garb reassessment proceedings. The Assessing Officer should not be allowed to cloak himself with the jurisdiction of reassessment to review his orders. The Hon'ble Delhi High Court in the case of CIT vs. Kelvinator of India (supra) has observed :- 23. . When a regular order of assessment is placed in terms of the said sub-section (3) of section 143, a presumption can be raised that such an order has been pas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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