TMI Blog2016 (8) TMI 1152X X X X Extracts X X X X X X X X Extracts X X X X ..... pressing our views with regard to the other questions. The order passed by the learned Tribunal and the CIT(A) are both set aside. The matter is remanded to the CIT(A) for hearing the appeal on merits. - ITA No. 155 of 2009 - - - Dated:- 30-8-2016 - ACJ Girish Chandra Gupta And Arindam Sinha, JJ. Mr.Siddhartha Bhattacharyya, Ms.Mamta Bhargava, Advocates For Appellant Mr.J.P.Khaitan,Sr.Advocate, Mr.P.Jhunjhunwala, Mr.Asok Bhaumik, Advocates For Respondent ORDER The Court : The subject matter of challenge is a judgment and order dated 18th December, 2008 passed by the Income Tax Appellate Tribunal, C Bench, Kolkata in ITA No. 142(Kol)/2008 pertaining to the assessment year 2001-02, by which the learned Tribunal dismissed an appeal preferred by the revenue. The revenue has come up in appeal, which was admitted on 8th September, 2010. The following substantial questions were formulated. (i) Whether the learned Tribunal is justified in following its own order passed in ITA 684(Kol.)/2008, dated June 23, 2008 in preference to the judgment of this Hon ble Court, reported in 2008 ITR 1023 (Cal.) ? (ii) Whether the aforesaid judgment of the Hon ble Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing views expressed by the Apex Court: Now, in the case before us, the ITO had, when he made the original assessment, considered the provisions of ss.9 and 10. Any different view taken by him afterwards on the application of those provisions would amount to a change of opinion on material already considered by him. The revenue contends that it is open to him to do so, and on that basis to reopen the assessment under s.147(b). Reliance is placed on Kalyanji Mavji CO. v. CIT [1976] 102 ITR 287 (SC), where a Bench of two learned judges of this court observed that a case where income had escaped assessment due to the oversight, inadvertence or mistake of the ITO must fall within s.34(1)(b) of the Indian I.T. Act, 1922. It appears to us, with respect, that the proposition is stated too widely and travels farther than the statute warrants in so far as it can be said to lay down that if, on reappraising the material considered by him during the original assessment, the ITO discovers that he has committed an error in consequence of which income has escaped assessment, it is open to him to reopen the assessment. In our opinion, an error discovered on a reconsideration of the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Assessing Officer has no power to review; he has the power to reassess. But reassessment has to be based on fulfilment of certain preconditions and if the concept of change of opinion is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, review would take place. One must treat the concept of change of opinion as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April, 1989, the Assessing Officer has power to reopen, provided there is tangible material to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. The reasons recorded for exercise of power under section 147 are as follows: It appears from records that the entire business of the assessee co. was not that of purchase and sale of shares but a part of its business was of purchase and sale of shares in which it incurred a loss of ₹ 80,01,831/-. The assessee co. also does not fall under any of the tests excepting as laid down in provisions of Explanation to section 73 of the I.T. Act, 1961. Hence the loss of ₹ 80,01,831/- incurred i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... okerage cannot be earned without purchase and sale of shares. The brokerage income is always a product of purchase and sale of shares in the hands of a share broker. It is bifurcated only for the purpose of determining service tax payable, which is an excise item, and the levy is on the value of services rendered to client by Stock Exchange Members. According to books of account maintained by the assessee, I am enclosing herewith a combined share purchase and sales account during the previous year relevant to assessment year 2001-02 Marked Annexure NO.1 to 48. A perusal of the combined account indicates that the assessee has derived income from share broking operation as has been shown in schedule 14 of the balance sheet at ₹ 15125115/-. The combined trading account also indicates the volume of purchases and sales made by the assessee company. The entire activities of purchase and sale in shares indicate a profit of ₹ 15125115/-. In schedule 14 a sum of ₹ 8001831/- has been shown in bracket as the reduction in value of the share stock held by the assessee company on their own account. This does not mean that this is a loss to the assessee whereby explanation to se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was not disputed by Mr. Khaitan, was factually incorrect. The assessing officer, who succeeded, realised that the assessee had misrepresented the facts to the earlier assessing officer. He in the circumstances issued the notice under section 148 and also recorded the reasons. It is not therefore a case of change of opinion. The facts have to be correctly understood by the concerned officer. When the concerned officer was under a misapprehension as regards the facts based on misrepresentation made by the assessee it cannot, in that case, be said that he subsequently changed his opinion when he issued notice seeking to disallow the loss earlier allowed expressly or impliedly to be set off against the income arising out of the brokerage of shares. The judgments cited by Mr. Khaitan do not really help him. In the case of Indian and Eastern Newspaper Society(supra), the question arose whether the assessing officer had changed his opinion with respect to the meaning and purport of sections 9 and 10 of the Act. In the case of Kelvinator India Ltd., reported in 256 ITR(supra), Mr.Khaitan has relied upon two sentences out of the context. Those two sentences are preceded by the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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