TMI Blog2002 (5) TMI 853X X X X Extracts X X X X X X X X Extracts X X X X ..... s from short term deposits of business income of the assessee for the purpose, an allowing deduction under section 80HHC when then same was not includible as per section 80HHC for assessment year under consideration. 2. Brief facts of the case are that original assessment in this case was passed on 22-3-1993. The assessee made claim for deduction under section 80HHC at ₹ 1,20,67,723. Assessing Officer while framing the assessment under section 143(3) restricted the said claim to ₹ 74,11,601. The assessee has shown interest on bank deposits aggregating to ₹ 119.16 lakhs as business income. Assessing Officer while passing order under section 143(3) also accepted interest income as business income. He issued notice under section 148 dated 23-12-1996 because he was of the view that interest income amounting to ₹ 119.16 lakhs was to be excluded for computation of deduction for the purpose of section 80HHC, requiring the assessee to file return in the prescribed Form within 30 days. The assessee challenged the action of the Assessing Officer on the ground that the proceedings were illegal. Even on merits, it was submitted that the assessee was eligible for ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efect in notice. 4.1 Ld. AR, on the other hand, was fair enough to concede that due to amendment by the Finance Act, 1996, w.e.f. 1-4-1989, Notice under section 148 requiring the assessee to file return within 30 days can no longer be called to be illegal. But he vehemently submitted that under rule 27 of the Income-tax (Appellate Tribunal) Rules, the assessee can support the order of ld. CIT(A) on any of the grounds decided against the respondent. For this, he relied on the following case law :- (a) CIT v. Sundaram Co. (P.) Ltd. 52 ITR 763 (Mad); (b) Kanpur Industrial Works v. CIT 59 ITR 407 (All); (c) B.L. Bamasi v. CIT 83 ITR 223 (Bom.); and (d) CIT v. Edward Keventer (Successors) (P.) Ltd. 123 ITR 200 (Delhi). Ld. AR submitted that reassessment is invalid because there was no reason to believe. Assessing Officer has duly considered the claim of the assessee under section 80HHC and has treated income from interest on bank deposit, etc. amounting to ₹ 119.16 lakhs as business income appearing in audited accounts under Schedule XI and details of which were furnished along with return at page 55 of the Annexure. The assessee claimed deduction at ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the decisions in the cases of CIT v. Lucas TVS Ltd. 234 ITR 296 (Mad.); and Indian and Eastern Newspapers Society v. CIT 119 ITR 996 (SC). Deduction has been claimed on the basis of audit certificate, which was part and parcel of return. Assessing Officer after considering all the documents allowed deduction under section 80HHC. Initially, Assessing Officer issued notice under section 154 for the purpose of a rectifying deductions allowed under section 80HHC but when the assessee pointed out that its income did not contain any income by way of interest on short term loan and there cannot be any action under section 154 asstt was reopened under section 147. On merits, he submitted that the surplus arising out of business transaction was credited to the bank a/c and interest earned from time to time and the same has always been assessed as business income. He relied on the following case law :- (i) Snam Progetti SPA v. Addl. CIT 132 ITR 70 (Delhi); (ii) CIT v. Tamil Nadu Dairy Development Corpn. Ltd. 216 ITR 535 (Mad.); (iii) CIT v. Ahmedabad Elecy. Co. Ltd. 203 ITR 521 (Bom.); (iv) CIT v. United Carbon India Ltd. 190 ITR 622 (Bom.); (v) CIT v. Paramount Premises (P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat reassessment is invalid and void. 5.1 Now we will deal with the plea of the assessee that reassessment is invalid because there is no reason to believe that the income escaped assessment because this is a case of change of opinion by the Assessing Officer and thus the issue before us is whether reopening is valid on account of change of opinion by the Assessing Officer on the same set of facts. Section 147 w.e.f. 1-4-1989 reads as under :- 147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also may 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 recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereinafter in this section and in sections 148 to 153 referred to as the relevant assessment year). From the above, it is seen that for applicability of section 147 the Assessing Officer must have reason to believe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vations in para 3 of the assessment order clearly speak that the Assessing Officer was also of the view that there can be two views for treating the interest income as business income :- ...In case of disputed issues where two views are possible action under section 147 is possible. In our view, section 147 does not empower the Assessing Officer to review on the same set of facts the assessment order which has already been framed merely by fresh application of mind to his own decision or to the decision of his predecessor. Fresh application of mind by the Assessing Officer on similar facts will tantamount to review of his own decision. Section 147, even after amendment does not authorise the Assessing Officer to reopen assessment under the garb of reason to believe for reviewing his own decision. In our considered view, this is a case where the Assessing Officer by applying his mind to the same set of facts has changed his opinion and change of opinion is not permissible for reopening even under the amended provisions of section 147. Assessing Officer has not brought any fresh/new material on record, neither any fresh information received. It is a case of absence of juris ..... X X X X Extracts X X X X X X X X Extracts X X X X
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