TMI Blog2015 (9) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... primary facts and not the responsibility of the assessee and there was no default on its part and the appeal filed by the revenue was dismissed. The reason for reopening, thus, being merely a change of opinion on account of the subsequent judgment of in Commissioner of Income Tax, Delhi Vs. Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT OF INDIA] would not give the Assessing Officer the jurisdiction to reopen as he would, thus, be reviewing his earlier decision which has been held not to be permissible. Similarly, in the absence of allegations that the assessee failed to disclose fully and truly all material facts, the assumption of jurisdiction was not justified. - Decided in favour of assessee - Income Tax Appeal No. 207 of 2014, Income Tax Appeal No. 208 of 2014, Income Tax Appeal No. 227 of 2014 - - - Dated:- 15-7-2015 - S. J. Vazifdar, ACJ And G. S. Sandhawalia, JJ. For the Petitioner : Mr. Tajender K. Joshi, Adv. For the Respondent : Mr. Rohit Jain, Adv. JUDGMENT G. S. Sandhawalia, J. 1. The present judgment shall dispose of three appeals which are directed against the order dated 5.4.2013 passed by the Income Tax Appellate Tribunal pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 80HHC of the Income Tax Act, 1961 (hereinafter referred to as the Act ). The said deductions pertaining to service income of ₹ 52,86,87,813/- were claimed in the duly supported form No. 10CCAC which was filed along with the return of income and the detailed working computation of deduction had been given along with the Auditor's Report. The claim of benefit was reduced to ₹ 1,02,01,403/- after excluding the excise duty and the sales tax from the turnover and that point was within the knowledge of the Assessing Officer that the assessee had received the said service income and the claim of deduction was related to such service income and the income was then assessed at a sum of ₹ 24,86,85,407/- on 31.3.2005. 4. Thereafter, the re-assessment proceedings were initiated under Section 148 of the Act by issuing notice dated 27.3.2006and the income was re-assessed at ₹ 25,30,84,690/- on 8.5.2006. The said reassessment was concluded on a different issue and not in connection with Section 80HHC. Thereafter, notice under Section 148 was issued on 31.3.2009, admittedly, after the expiry of four years from the end of relevant assessment year on the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the service income separately and it had been duly certified by the Auditor's Certificate in the requisite form. The interest on excise duty and the sales tax has been reduced from the said claim and the deduction had been modified and therefore, all the facts had been disclosed and there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. It was further held that the re-opening was done in view of the judgment rendered in K. Ravindranathan Nair's case (supra). It was accordingly held that the assessee had done his duties and it was for the Assessing Officer to draw the correct inference from the primary facts and not the responsibility of the assessee and there was no default on its part and the appeal filed by the revenue was dismissed. The cross-appeal filed by the assessee, pertaining to the validity of the proceedings, was allowed by noticing that the re-assessment proceedings were initiated under Section 148 of the Act beyond the four years from the end of the relevant financial year and it was held invalid and unsustainable. 7. The issue of initiating proceedings under Section 147 was considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons 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 thereon would be prolonging the proceedings unnecessarily. 9. Similarly, in Winsome Textiles Industries Ltd. Vs. Union of India others [2005] 278 ITR 470, it was held that once the assessment had been made under Section 143(3), the genuineness of the claims made in the return had to be examined and the failure of the AO to do so would not permit him to reopen the assessment which had already been comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 147 of the Act [with effect from 1st April, 1989], they are given a goby and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to re- open the assessment. Therefore, post-1st April, 1989, power to re-open is much wider. 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 reopen 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 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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