TMI Blog2016 (6) TMI 1214X X X X Extracts X X X X X X X X Extracts X X X X ..... sed for the Asstt.Year 2004-05. 2. Solitary ground of appeal raised by the Revenue is that the ld.CIT(A) has erred in quashing reassessment order. 3. Brief facts of the case are that the assessee has filed its return of income on 1.11.2004 declaring total loss of ₹ 9,59,87,357/-. An assessment order was framed under section 143(3) of the Income Tax Act on 29.12.2006. The income of the assessee was computed at ₹ 26,66,90,113/- as against the returned loss. The AO, thereafter, reopened the assessment and issued notice under section 148 of the Income Tax Act on 23.3.2010. The AO has passed reassessment order on 18.11.2010. Dissatisfied with the reassessment, the assessee carried the matter before the ld.CIT(A). The ld.CIT(A) has quashed the reassessment order by way of impugned order. The basic reason assigned by the ld.CIT(A) is that the assessment has been reopened by issuance of notice under section 148 of the Act after expiry of four years from the end of the assessment year. The AO, nowhere, alleged that the income has escaped assessment on account of failure of the assessee to disclose all material facts fully and truly. 4. We have considered rival contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escapement was due to failure on the part of the assessee- (i) to file a return u/s 139; (ii) to file a return in response to notice u/s 142(1) or section 148; (iii) to disclose fully and truly all material facts necessary for the assessment. All these aspects must come in the reasonings recorded by the AO. The reasons recorded by the AO should reflect (i) assessee in respect of whom assessment is sought to be reopened; (ii) assessment year as sought to be reopened; (iii) amount of income which has escaped assessment; (iv) how the original assessment has been done whether u/s 143(1) or u/s 143(3) or sec.147/148; (v) what is the reason of escapement of assessment; (vi) whether there is any failure as mentioned in the proviso if assessment is sought to be reopened after four years from the end of the relevant Asst. Year; (vii) in particular, whether there is any the failure of the assessee to disclose material facts fully and truly necessary for the assessment for that assessment year. (viii) if assessment is done u/s 143(1), then whether the provision of section 149 are applicable. 8. If reasons recorded did not ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the present case. In the said case, the Bombay High Court has held that the assessing authority has overlooked the disputed item which he has noticed subsequently and at the time of passing the original order of assessment, he could not be said to have opined on the above item. Therefore, there was no change of opinion. While in the present case, complete details were furnished along with the return and during the course of the assessment proceedings and after an application of mind, the deduction under section 36(1)(viii) of the Act was allowed. In the reason recorded no case has been made out that there was failure to disclose any material particular on the part of the assessee. Therefore, limitation beyond the period of four years was not available to the assessing authority. Admittedly, the notice was issued after four years, therefore, the proceeding was barred by time and the Tribunal has rightly held so. For the reasons stated above, the appeal fails and is dismissed. Hon. Bombay High Court, in the case of Bhavesh Developers vs. A.O. Others (2010) 329 ITR 249 (Bom), noted that the recorded reasons did not show finding that there was a failure to disclose ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment, but at the same time we have to bear in mind that it is not any and every material, howsoever vague and indefinite or distant, remote and far fetched, which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment. Hon. Supreme Court in the case of CIT vs. Kelvinator India Ltd. (2010) 320 ITR 561(SC), while dismissing the legislation of section 147, held that expression reasons to believe needs to be given schematic interpretation in order to ensure against an arbitrary exercise of power by the AO. The power to reopen the assessment is not akin to power to review the assessment and mere change of opinion would not justify the course of action u/s 147. Unless the AO has tangible material fact to reopen the assessment, power u/s 147 cannot be validly exercised. 9. In the present case there is a clear case of change of opinion. Even though reliance has been placed on the decision of Hon. Supreme Court in Ballimal Navalkishore and others vs. CIT (supra), that judgment existed at the time when the AO took the decision u/s 143(3) and held the expenditure as current repairs allowable in the profit and loss acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on captive power plant at an amount of ₹ 63,66,750/-. However, in the order passed u/s. 143(3) of the Act, the Assessing Officer has given excess depreciation of ₹ 2,09,56,984/-. This figure has been worked out, based on the figure of depreciation to be allowed, which was mentioned by Assessing Officer at the time of working out disallowance, at para 4.3 of the assessment order in respect of various assets. The working of excess depreciation, allowed by the Assessing Officer, is as under:- Date of purchase of asset Name of asset Rate of depreciation 1st Half 2nd Half Depreciation allowable Depreciation allowed in asst. order Excess depreciation Factory building power 10% 5894517 41808447 2679874 4475571 1795696 Pipe fittings 25% ..... X X X X Extracts X X X X X X X X Extracts X X X X
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