TMI Blog2015 (11) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... d. CIT (A) that the reopening is based on change of opinion which is not permissible as held by Hon’ble Supreme Court in CIT vs. Kelvinator of India Ltd. (2010 (1) TMI 11 - SUPREME COURT OF INDIA).- Decided in favour of assessee. - ITA No.4277/Del./2013 - - - Dated:- 21-10-2015 - SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI A.T. VARKEY, JUDICIAL MEMBER For The Assessee : Shri P.N. Mehta, AR For The Revenue : Shri Bibhu Dutt Mishra, CIT DR ORDER PER A.T. VARKEY, JUDICIAL MEMBER : This appeal, at the instance of the revenue, is directed against the order of the Commissioner of Income-tax (Appeals)-XII, New Delhi dated 12.04.2013 for the assessment year 2007-08. 2. The solitary ground of appeal taken by the revenue is against quashing of the assessment proceedings u/s 147/148 of the Income-tax Act, 1961 (hereinafter the Act ) by the CIT (A). 3. Brief facts of the case are that the assessee corporation is a Central Government undertaking engaged primarily in agricultural activities. The income which is liable to tax is income from trading in seeds, income from property and other sources like interest etc. 3.1 The return of income for the year under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nistrative Other Expenses Sch. 21). As this provision was not allowable, the same should be disallowed and added back to the income of the assessee. 4. It is also noticed that as per return filed by the assessee an amount of ₹ 4,49,645/- has been deducted as disallowance u/s 40(Sch. BP Pt. 27) from computation and the same has again been deducted under any other amount allowed as deduction (Sch. BP Pt. 30). As this amount has been deducted twice, therefore the excess deduction of ₹ 4,49,645/- should be disallowed and added back to the income of the assessee. 5. In view of this, I have reason to believe that an amount of ₹ 2,07,22,855/- (1,89,48,604 + ₹ 13,24,606/- + 4,49,645/-) has escaped assessment within the meaning of section 147 of the IT Act 1961. From the reasons above, it is apparent that they' have been taken from the assessee's balance-sheet as well as Profit Loss A/c which were also before the Assessing Officer at the time of original assessment hence no escapement of income can be attributed to the assessee. In this respect assessee in his submission has stated that - all the information had been furnished before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was held after considering the various amendments u/s 147 of the LT. Act, held that: the Assessing Officer cannot re-open assessments on the basis of mere change of opinion and if the same is done it would give arbitrary powers to the AO to reopen the past assessments on mere change of opinion and this is not permissible even as per legislative intent. The Bombay High Court in the case of OHM Stock Brokers (P) Ltd. Vs Commissioner of Income Tax Anr. in writ petn. Nos. 79 to 82 of 2013 vide order dated 20th February, 2013 wherein it is held that:- Though the power of the AO to reopen as assessment within a period of four years is indisputably wider than when an assessment is sought to be reopened beyond four years, the power is nonetheless not unbridled. After the amendment which was brought in by the Direct Tax Laws (Amendment) Act, 1987 w.e.f 1st April 1989, the AO must have reason to believe that income has escaped the assessment. At the same time, the AO is not conferred with the power to review an assessment and he cannot reopen as assessment only because of a mere change in the opinion. The AO must, in other words, have tangible material to come to the conclusion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the conclusion is that the reopening of the assessment was on a mere change of opinion and was impermissible in law. For these reasons, the conclusion is that the reopening of the assessments under s. 147 for assessment years 2007-08 and 2008-09 is contrary to law. The notices issued under s. 148 for the aforesaid years are quashed and set aside - CIT Vs Kelvinator of India Ltd. (2010) 228 CTR (SC) 488: (2010) 34DTR (SC) 49: (2010) 320 ITR 561 (SC) The Assessing Officer was not correct in his action to assume jurisdiction over the appellant for the year under consideration. Additionally reasons recorded are based on Balance Sheet and Profit Loss A/c furnished with return of income and was accepted in original assessment. It is a case of reappraisal of same facts. On which earlier Assessing Officer had taken a view on which the new Assessing Officer differs. In view of the above, it is submitted that, proceedings initiated u/s 147 of the Act and completion of assessment u/s 147/143(3) of the Act is ab-initio void and illegal is therefore quashed. As the assessment proceeding u/s 147/148 has been quashed. Hence there is no need to go in to the merit in the case Rahul Kum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble High Court held as under :- The audit objection was an inference that the royalty payment resulted in a capital benefit; such an opinion expressed by the audit could not constitute tangible material on the basis of which the assessment could be reopened. Therefore, the notice within the period of four years from the end of the assessment year 2004-05 was not valid . Ld. AR submitted that the AO had made an addition of ₹ 2,07,22,855/- without assigning any reason and pointed out that the assessee had not claimed the expenses in its return of income. He further submitted that complete information was furnished before the Assessing Officer at the time of completion of the original assessment under section 143(3) and the information on all the items were available on record at the time of the original assessment. In view of the aforesaid submissions, ld. AR submitted that the reassessment is made only on the basis of a mere change of opinion which could not be a ground for reopening assessment proceedings. In the aforesaid circumstances, he submitted that the ld. CIT (A) has rightly quashed the reassessment proceedings and wanted us not to interfere with the order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view that the CIT (A) is right in holding that none of these expenses had been claimed by the assessee on the basis of which the reassessment proceedings were initiated and in this regard, ld. CIT (A) rightly relied upon the following judgments :- (i) CIT vs. USHA International Ltd. in ITA No.2026/2010 dated 21.09.2012; (ii) Hon ble Supreme Court s judgment in the case of M/s. Kelvinator of India Limited [2010-TIOL-06-SC-IT-LB]; (iii) Hon ble Bombay High Court s judgment in the case of OHM Stock Brokers (P) Ltd. vs. CIT Anr. In WP Nos.79 to 92 of 2013 vide order dated 20.02.2013. In view of the above, we are of the opinion that the CIT (A) has rightly held that the AO was not correct to assume jurisdiction over the assessee for the year under consideration and no new facts were brought on record which gave reasons to believe that the income of the assessee had escaped assessment and, therefore, the reopening of assessment in the present case had been merely on the basis of change of opinion. Further, it is evident that all the material information was available in the course of original assessment for framing an assessment and the AO failed to bring on record new ..... 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