TMI Blog2016 (7) TMI 1404X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 of the Act was wholly illegal, without jurisdiction and had been issued without fulfilling the pre-requisite conditions laid down for assumption of valid jurisdiction. The order of the ld. C.I.T.(Appeals) is vitiated being ab initio void as the same has been passed in disregard of the settled law that mere change of opinion is not permissible in law for assumption of a valid jurisdiction to reopen a case. 1.1 That the ld. C.I.T. (Appeals) has failed to appreciate that there was material on record to show that there had been any failure on the part of the assessee to disclose fully and truly all material facts relevant to the computation of income for the assessment year under consideration. The finding that that reopening done by the AO is in accordance with criteria laid down by Hon'ble Supreme Court is devoid of any merit and is thus unsustainable. 1.2 That the ld. C.I.T.(Appeals) has further failed to appreciate that the AO has not disposed off all the objections raised by the assessee to the initiation of reassessment proceedings and as such the assessment as framed was wholly illegal and without jurisdiction. 1.3 That the ld. C.I.T.(Appeals) has grossly ignored ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had claimed deduction u/s. 54EC which was wrongly been allowed. Accordingly, the proceedings u/s. 147/148 of the Act were initiated by issue of notice dated 30.3.2012. In response thereof, the assessee vide letter dated 6.4.2012 that the return of income filed originally may be treated to have been filed in response to notice u/s. 148 of the Act. The reasons recorded were duly provided to the assessee alongwith the notice issued u/s. 148 of the Act. Thereafter the objections raised were also duly complied with vide AO's letter dated 24.1.2013. In response to statutory notice, Ld. Authorized Representative of the Assessee filed letter dated 6.2.2013 in DAK and the same was perused by the AO. AO observed that during the year under consideration, the assessee sold property No. D-828, 2nd floor, New Friends Colony, New Delhi on 21.2.2005 for a consideration of ₹ 80 lacs. The assessee had claimed deduction u/s. 54EC in respect of investment made in specified bonds of NHB on 27.8.2005. AO observed that on plain reading of the section 54EC(1) it reveals that no deduction shall be allowed in respect of the investment made after a period of six months from the date of such tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd of the settled law that mere change of opinion is not permissible in law for assumption of a valid jurisdiction to reopen a case. He further stated that there was material on record to show that there had been any failure on the part of the assessee to disclose fully and truly all material facts relevant to the computation of income for the assessment year under consideration. It was further stated that the finding that reopening done by the AO is in accordance with criteria laid down by Hon'ble Supreme Court is devoid of any merit and is thus unsustainable. He further stated that the reasons recorded as referred to the record that were already available at the time of original assessment. Hence, no fresh or tangible material came into the hands of the AO when reasons were recorded and it is a case of change of opinion, which is not permissible, in view of the law settled by the Hon'ble Supreme Court of India in the case of CIT vs. Kelvinator of India Ltd. (2010) 320 ITR 561 (SC), therefore, he requested that the orders of the authorities below be set aside and the reassessment proceedings as initiated be held as illegal and the same may be quashed. 6. On the other ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me fully and truly all material facts necessary for his assessment. I have also reasons to believe that the income of ₹ 30,00,000/- (Capital gains) has escaped assessment in the case and the same is to be brought to tax under section 147/148 of the Income Tax Act. Sd/- (I.P. MADAN) Income Tax Officer, Ward 15(1), New Delhi 7.1 After going through all the records available with us, we find that in this case the reassessment seeks to review the original assessment without any fresh or tangible material and was actuated by Change of opinion in the original assessment. We note that the AO in the reasons recorded has referred to the record which were already available at the time of original assessment. No fresh or tangible material came into the hands of the AO when reasons were recorded. In the circumstances, the reopening was sought to be made only to review the original assessment which was actuated by Change of opinion by the AO, which is clearly impermissible in view of the law settled by the Hon'ble Supreme Court of India in the case of CIT vs. Kelvinator of India Ltd. (2010) 320 ITR 561 (SC). The Hon'ble Apex Court in the aforesaid case has analyzed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usion 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 reason to believe , Parliament re-introduced the said expression and deleted the word opinion on the ground that it would vest arbitrary powers in the Assessing Officer. We quote herein below the relevant portion of Circular No. 549 dated 31st October, 1989, which reads as follows: 7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression 'reason to believe' in Section 147.-A number of representations were received against the omission of the words 'reason to believe' from Section 147 and their substitution by the 'opinion' of the Assessing Officer. It was pointed out that the meaning of the expression, 'reason to believe' had been explained in a number of cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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