TMI Blog2015 (9) TMI 1625X X X X Extracts X X X X X X X X Extracts X X X X ..... "reason to believe", we may be guided by another judgment of the Hon'ble Apex Court in the case of Kelvinator of India Ltd.[2010 (1) TMI 11 - SUPREME COURT OF INDIA]. The case was rendered surely in the context of original assessment having been made under section 143(3) of the Act however, the interpretation made was that of the phrase 'reason to believe', which is applicable equally to the cases made under section 143(1)(a) as well as 143(3) of the Act - Decided in favour of assessee. - ITA No.828/Chd/2014 - - - Dated:- 14-9-2015 - SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER Appellant by : S/Shri Ravi Shankar Rohit Kaura Respondent by : Shri S. K. Mittal , DR ORDER Ms. Rano Jain, Accountant Member This appeal filed by the assessee is directed against the order of learned Commissioner of Income Tax (Appeals), Shimla dated 23.7.2014. 2. The brief facts of the case are that the assessee firm is having manufacturing unit located at Baddi and is engaged in manufacturing of rail coach components and railway electronic components. The firm's branch in Mohali is trading in rail coach components and servicing of railway air ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at of the Hon'ble Delhi High Court in the case of CIT v. SPL's Sidhartha Ltd. [2012] 345 ITR 223 (Delhi) and CIT v. Orient Craft Ltd. [2013] 354 ITR 536 (Delhi). With the help of these judgments, it was submitted that the Assessing Officer had an opinion in favour of the assessee but afterwards changed his opinion and view regarding the issue of treating the year of substantial expansion as the initial year, thus making the whole reopening on the change of opinion. In view of this, it was prayed that the assumption of jurisdiction of reopening itself is void ab-initio and liable to be quashed and the appeal of the assessee may be allowed in its favour. On merits of the case, the assessee relied upon the order of the ITAT Delhi Bench in the case of Tirupati LPG Industries Ltd. v. Dy. CIT in ITA No.991/Del/2013 dated 29.1.2014 and another judgment of the ITAT, Chandigarh Bench in the case of Asstt. CIT v. Raghunath Singh Thakur in ITA Nos.152, 469 and 1144/Chd/2010 dated 22.6.2010 5. The learned CIT (Appeals) did not find herself in agreement with the submissions of the assessee, after analyzing the provisions of section 80-IC of the Act and the issue of initial year and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and also by not considering the judgments saying these are not of the Jurisdictional Courts. 5. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard and disposed off. 7. The learned counsel for the assessee submitted before us that ground Nos.1 to 3 relate to the addition made on account of deduction under section 80-IC of the Act being given @ 25% as against 100% claimed by the assessee. He fairly submitted before us that the issue as on date is covered against the assessee by a latest order of the ITAT, Chandigarh Bench in the case of Hycron Electronics in ITA No.798/Chd/2012 dated 27.5.2015, whereby it has been held that the assessee having been already availed full deduction @ 100% in earlier five years is eligible to get only 25% of deduction in the current year. However, the learned counsel for the assessee made detailed submissions on the legal ground raised by him as per ground No.4. It was submitted before us that reopening has been made after the original assessment having been made under section 143(1) of the Act. The Assessing Officer did not have any tangible material coming into his possession and only on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t done by the Assessing Officer under section 143(3) r.w.s. 147 of the Act is as per law. 9. We have heard the rival contentions and perused the material available on record. Since the assessee has raised legal issues and lengthy arguments were made on this behalf from both the sides, we will adjudicate the same first. 10. From the perusal of reasons recorded and material available on record, we do not come across any tangible material coming in the notice of the Assessing Officer for formation of belief. The words used time and again in the reasons recorded are 'it is noticed that'. No reference to any other material is given. Even at the time of hearing before us, no such material could be brought to our notice. Therefore, admittedly, what triggered the Assessing Officer to reopen the case after issuing intimation under section 143(1) of the Act, is not coming out of records. In view of this, we proceed to discuss whether the provisions of section 147 of the Act, read with section 148 of the Act are still applicable to the present case or not. 11. It is a trite law by now, that the only condition for the Assessing Officer to reopen the case is that for whatever r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eopened on any pretext, whatsoever, can also not be the intention of Legislature. There is a fine line of distinction between these cases. This is a very logical and plausible interpretation, that in cases under section 143(1)(a) if the case is reopened, it cannot be considered being made on change of opinion, since there was firstly no opinion then how can there be a change of opinion. This view has also been propounded by the Hon'ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers (P.) Ltd. (supra). However, coming to the next aspect, whether the Assessing Officer can reopen any case made under section 143(1)(a), without there being any material in his possession to form a belief. Even in the case of Rajesh Jhaveri Stock Brokers (P.) Ltd. (supra), the Hon'ble Supreme Court has held that : 18. So long as the ingredients of s. 147 are fulfilled, the AO is free to initiate proceeding under s. 147 and failure to take steps under s. 143(3) will not render the AO powerless to initiate reassessment proceedings even when intimation under s. 143(1) had been issued. 15. The logical interpretation is that in all cases, for reopening, the basic ingredients of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal assessment was made only under section 143(1)(a) of the Act without there being any trigger coming into the possession of the Assessing Officer, some very weird situations may arise in consequence. The Income Tax Act is a very structured law, whereby all the Chapters, Sections, Sub-sections are made in a very well defined classified manner. Limitations have been provided at places, wherever required. A time limit is fixed for the issue of notice under section 143(2) of the Act for cases coming under scrutiny, these are the cases where the Assessing Officer chooses to process the returns filed by assesses. If the Assessing Officers are given free hand to reopen any of the cases of assessee under section 143(1)(a) of the Act without there being any trigger in their possession. The provisions of notice under section 143(2) of the Act will become redundant or rather the provisions of notice under section 143(2) and notice under section 148 of the Act will overlap. There will not be any embargo placed before the Assessing Officers to scrutinize the case in terms of time limit. They can open the case by issue of notice under section 143(2) of the Act (within the period prescribed und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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