TMI Blog2016 (5) TMI 404X X X X Extracts X X X X X X X X Extracts X X X X ..... materials available on record would only amount to re-appreciation of existing facts already on record which would amount to review and would only tantamount to change of opinion. Moreover we find that the proviso to section 147 of the Act would come into play in the facts of the instant case as admittedly the reopening is done after the end of 4 years from the end of the relevant assessment year. Then it is the duty of the Learned AO to prove as per the proviso that the reopening is warranted due to failure on the part of the assessee by not making full and true disclosure of material facts necessary for assessment. This crucial condition is conspicuously absent in the facts of the present case and hence reopening beyond 4 years could not be done even as per the statute. - Decided in favour of assessee. - ITA No. 632/Kol/2013 - - - Dated:- 29-3-2016 - Shri M. Balaganesh, Accountant Member, and Shri S.S.Viswanethra Ravi, Judicial Member For The Appellant : Shri Rajat Kr. Kureel. JCIT, ld.Sr.AR For The Respondent : Shri D.S.Damle, FCA, ld.AR ORDER SHRI M.BALAGANESH, AM This appeal of the revenue arises out of the order of the Learned CIT(A), VIII, Kolkata ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shares : ₹ 1,25,65,881/- ₹ 3,97,72,314/- (iii) Profit from Derivative Trading : ₹ 29,502/- (iv) Dividend : ₹ 41,86,449/- ₹ 16,19,15,931/- Less: Expenses : ₹ 15,43,39,229/- Profit ₹ 75,76,702/- Computation Sheet :- Profit from Speculation Business : ₹ 75,76,702/- Less: Dividend Exempt u/s 10(33) : ₹ 41,86,449/- ₹ 33,90,252 Less: Speculation loss brought forward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom A.Yr. 2003-04 ₹ 2,90,686.37 ₹ 34,02,194.23 Set off restricted to ₹ 33,90,252.00 (remaining balance of ₹ 11,942.23 for A.Yr. 2003-04 is allowed to carry forward as per law) INCOME FROM OTHER SOURCES : ₹ 33,657/- Gross Total Income ₹ 9,62,636/- Less: Deduction u/s 80HHC ₹ 2,54,570/- Assessed Total Income ₹ 7,08,066/- Rounded off to ₹ 7,08,070/- Assessed u/s 143(3) as above. 6.1. The Learned AR argued that from the above assessment order it could be easily concluded that the Learned AO had duly applied his mind with regard to the taxing of profit from trading of shares as speculation profit and moreover, the main heading also has been duly classified by the Learned AO as Income from Speculation . He further argued that the Learned AO had duly applied his mind on the impugned issue by also allowing the brou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also hold that the Learned AO by his judicial behaviour in the original assessment proceedings u/s 143(3) of the Act had indeed formed an opinion on proper application of mind. We also agree with the arguments of the Learned AR that there is no fresh tangible material available with the Learned AO to justify the impugned action of resorting to reopen the assessment. We hold that where there was no new material or information which came to the knowledge of the Learned AO to re-initiate proceedings and since he had derived the facts and materials placed by the assessee itself during the original assessment proceedings , that did not constitute new information. Hence subsequent action on the part of the Learned AO in reopening the assessment based on the same materials available on record would only amount to re-appreciation of existing facts already on record which would amount to review and would only tantamount to change of opinion. Moreover we find that the proviso to section 147 of the Act would come into play in the facts of the instant case as admittedly the reopening is done after the end of 4 years from the end of the relevant assessment year. Then it is the duty of the Lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Under the Direct Tax Laws (Amendment) Act, 1987, the Parliament not only deleted the words reason to believe but also inserted the word opinion in section 147. However, on receipt of representations from the companies against omission of the words reason to believe , the Parliament reintroduced the said expression and deleted the word opinion on the ground that it would vest arbitrary powers in the Assessing Officer. The Delhi High Court in CIT vs. Kelvinator of India Limited [2002] 256 ITR 1 (Del.) [decision affirmed by the Supreme Court in [2010] 320 ITR 561 (SC)] held that if two interpretations are possible, the interpretation which upholds constitutionality, it is trite, should be favoured. In the event it is held that by reason of section 147 if the ITO exercises his jurisdiction for initiating a proceeding for reassessment only upon a mere change of opinion, the same may be held to be unconstitutional. We are therefore of the opinion that section 147 of the Act does not postulate conferment of power upon the A.O. to initiate reassessment proceeding upon his mere change of opinion. If reason to believe of the A.O. is founded on an information which might have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to the revenue, the loss incurred was a speculative loss. Rejection of the objections of the assessee to the re-opening of the assessment by the assessing officer vide his order dated 23.6.2006, is clearly a change of opinion. In the circumstances, we are of the view that the order re-opening the assessment was not maintainable. The civil appeal is, accordingly, dismissed. No order as to costs. d. In CIT Vs. Orient Craft Ltd reported in 29 Taxmann. Com 392(Del),the Hon ble Delhi High Court held that :- Finality of intimation under section 143(1) can be disturbed only if Assessing Officer has 'reason to believe' . The assessee's contention that even an assessment made under section 143(1) of the Act can be reopened under section 147 if the Assessing Officer has 'reason to believe' that income chargeable to tax has escaped assessment, is sound. It is true that no assessment order is passed when the return is merely processed under section 143(1) and an intimation to that effect is sent to the assessee. However, it has been recognized by the Supreme Court itself in Asstt. CIT v. Rajesh Jhaveri Stock Brokers (P.) Ltd. [2007] 291 ITR 500 / ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn under section 143(1) and thereafter 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. [Para 13] The Supreme Court in Rajesh Jhaveri Stock brokers (P.) Ltd.'s case (supra) has held that the strict requirements of section 147 can be compromised. On the contrary, from the observations it would appear clear that the court reiterated that 'so long as the ingredients of section 147 are fulfilled an intimation issued under section 143(1) can be subjected to proceedings for reopening. The Court also emphasized that the only requirement for disturbing the finality of an intimation is that the Assessing officer should have reason to believe that income chargeable to tax has escaped assessment. The expression reason to believe have two different standards or sets of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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