TMI Blog2017 (12) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision on the facts. The Assessing Officer has not applied his mind whether the petitioner was to be taxed u/s 9(1)(vi) of the Act at all for providing of rental of fishing tools/equipments etc. Section 292(B) of the Act was not applicable in the present case. Moreover, Section 292(B) only provides for the return of income to be invalid by reason of any mistake defect or omission in such return of income. Thus, according to the reasons assigned, there was tangible material for formation of belief by the Assessing Officer to reopen the assessment. It is in these circumstances, the notice u/s 148 of the Act was issued to the petitioner company. The objections raised by the petitioner company to the reasons assigned for reopening of case h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igned by the respondent no.2 for reopening of the assessment vide Annexure No.4. Petitioner filed objections against the same on 12.10.2010. Objections were disposed of by the respondent no.3 vide order dated 7.12.2010. 3. Petitioner, being a non-resident company, filed the return of income at ₹ 30,626,953/- on 31.10.2005 u/s 44BB(1) of the Act by applying the deemed profit rate of 10% on the gross contractual revenues. On 28.12.2007, the assessment was completed u/s 143(3) of the Act at the income of ₹ 30,645,553/-. However, during the assessment years, petitioner-company had derived revenues for providing of rental of fishing tools/equipments etc. to ONGC Ltd., B.G. Exploration Production India Ltd., Cairn Energy India Pv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he notice u/s 148 of the Act was issued to the petitioner company. The objections raised by the petitioner company to the reasons assigned for reopening of case have been discussed in length by the respondent no.1. The Assessing Officer is required to consider all possible angles of controversy. In the instant case, the tax has escaped assessment on account of failure of assessee to disclose true facts before the authority concerned. 6. Their Lordships of Hon. Supreme Court in (2010) 2 SCC 723 in the matter of Commissioner of Income Tax Delhi v. Kelvinator of India Ltd. has held that after amendment of 1989, the A.O. can reopen assessment provided he has reason to believe that income has escaped assessment based on tangible material. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld take place. 77. 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 1-4-1989, 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. Our view gets support from the changes made to Section 147 of the Act, as quoted hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words reason to believe but also inserted the word opinion in Section 147 of the Act. However, on receipt of representations from the companies against omission of the words reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es not, however, apply to cases where income chargeable to tax has escaped assessment on account, inter alia, of the failure of the assessed to disclose fully and truly all material facts. The argument that production of the account books and other documentary evidence relevant for assessment must imply a full and true disclosure of all material facts must be rejected out of hand in the light of the provisions of Explanation (1). The Division Bench further held that the there may be a presumption that the assessment proceedings have been regularly conducted, but there can be no presumption that even when the order of assessment was silent, all possible angles and aspects of a controversy had been examined and determined by the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to the mind of the assessing officer and had been held in favor of the assessed is too far fetched a proposition to merit acceptance. There may indeed be a presumption that the assessment proceedings have been regularly conducted, but there can be no presumption that even when the order of assessment is Page 436 silent, all possible angles and aspects of a controversy had been examined and determined by the assessing officer. It is trite that a matter in issue can be validly determined only upon application of mind by the authority determining the same. Application of mind is, in turn, best demonstrated by disclosure of mind, which is best done by giving reasons for the view which the authority is taking. In cases where the order passed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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