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Gampa Venkatesam Versus Income Tax Officer Ward-2 KARIMNAGAR

Reopening of assessment - Held that:- What the AO is now seeking to tax the amount is on the basis of change of opinion and it is not permissible, as the AO has accepted the same and completed the assessment in terms of Section 143(3). Moreover, as already stated earlier, the reopening is after 4 years and there is no failure on the part of the assessee to make full disclosure. On the same material furnished by assessee, the reopening was done, which cannot be sustained. - There is neither a .....

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other sources, even after accepting that an amount of ₹ 1,50,300/- pertains to a firm. Without even understanding whether the amount was an addition to the income returned or disallowance of the expenditure claimed, the Ld. CIT(A) confirms the ‘disallowance’ made by the AO. This shows not only the non-application of mind by the CIT(A), but also total ignorance of facts and law on the matter under consideration. In our opinion it is the CIT(A) who took hyper technical view and not assessee. .....

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he assessment after Assessing Officer (AO) duly enquired the issue on which reopening was undertaken. 2. Briefly stated, assessee is an individual and has admitted income of ₹ 5,62,047/- originally. The AO in the course of scrutiny assessment, specifically issued a Show Cause Notice to assessee about the deposits made in the bank account vide letter dt. 16-08-2007. Assessee vide reply filed on 22-10-2007 dt. 05-10-2007 has replied that his close friend one Mr. K. Rajender Rao had opened th .....

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avit from Shri. K. Rajender Rao dt. 04-10-2007 and the statement of bank account and account copy of the firm in which the said ₹ 1,50,330/- was also reflected. AO after due enquiry and having satisfied passed an order u/s 143(3) on 16-06-2008. It was clearly stated in the order that the assessment was completed based on the information from CIT-CIB, Hyderabad and after verification of the material produced, the income returned was accepted. This assessment was completed by Dy. CIT, Circle .....

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gh AO acknowledges that the amount of ₹ 1,50,300/- pertains to M/s. Vital Agencies and the net amount stated to be pertaining to Mr. K. Rajender Rao was ₹ 14,27,000/-, he makes the addition of entire amount of ₹ 15,77,300/- in the re-assessment proceedings completed on 28-03-2013. Assessee challenged the order of the reassessment questioning that the reopening is on mere presumptions and without having any reason to believe and mere change of opinion. Assessee also questioned t .....

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posits in the bank account was examined by the Dy. CIT in the course of assessment and having satisfied about the genuineness of the claims, accepted the same without making any addition. On the basis of the same submissions made before the Dy. CIT and affidavit placed on record, the assessment was reopened after four years. It is submitted that there is no failure on the part of assessee in making full and true disclosure and therefore reopening of assessment on mere change of opinion is not pe .....

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ustify the transactions in the bank account. Having satisfied about the same, the AO completed the assessment without making any addition of the same. Since the assessment was reopened after the end of the four year period, it is imperative that AO should record a satisfaction that income chargeable to tax has escaped assessment for such assessment year by reasons of the failure on the part of assessee to disclose fully and truly all material facts necessary for his assessment for that assessmen .....

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case within the purview of change of opinion . In CIT Vs. Usha International Ltd., [348 ITR 485], the Full Bench of Hon'ble Delhi High Court laid down the following propositions of law: (i) the expression "change of opinion" postulates formation of opinion and then a change thereof. In the context of section 147 of the Income-tax Act, 1961, it implies that the Assessing Officer should have formed an opinion at the first instance, i.e., in the proceedings under section 143(3) and by .....

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nal assessment proceedings but thereafter the Assessing Officer does not make any addition in the assessment order. In such situations, it should be accepted that the issue was examined but the Assessing Officer did not find any ground or reason to make addition or reject the stand of the assessee. He forms an opinion. The reassessment will be invalid because the Assessing Officer had formed an opinion in the original assessment, whether or not he had recorded his reasons in the assessment order .....

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the first proviso to Section 147, re-assessment proceedings beyond the period of four years from the end of the relevant assessment year would be without jurisdiction and bad in law; 7. As seen from the assessment record, the question examined during the course of assessment proceedings indicate that AO has applied his mind to the deposits in the bank account and did enquire about the genuineness of the transactions. It is evident that the AO has examined the issue originally and was satisfied w .....

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ion 147 of the Act. The said submission is fallacious. An order of assessment can be passed either in terms of sub-section (1) of section 143 or sub-section (3) of section 143. When a regular order of assessment is passed in terms of the said sub-section (3) of section 143 a presumption can be raised that such an order has been passed on application of mind. It is well known that a presumption can also be raised to the effect that in terms of clause (e) of section 114 of the Indian Evidence Act .....

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, in our view, what the AO is now seeking to tax the amount is on the basis of change of opinion and it is not permissible, as the AO has accepted the same and completed the assessment in terms of Section 143(3). Moreover, as already stated earlier, the reopening is after 4 years and there is no failure on the part of the assessee to make full disclosure. On the same material furnished by assessee, the reopening was done, which cannot be sustained. 9. We are surprised by the way the Ld. CIT(A) d .....

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