TMI Blog2018 (10) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... rive at a finding that, income has escaped assessment. The Assessing Officer, is trying to review his order of scrutiny assessment. In the facts of the present case, he is seeking to have a different opinion than that expressed in the order of scrutiny assessment, on the basis of the same materials. The same is not permissible. - decided in favour of assessee - W.P. No. 232 of 2011 - - - Dated:- 27-9-2018 - DEBANGSU BASAK, J. For the Petitioner: Mr. R.V. Easwar, Sr. Advocate Mr. Abhrotosh Mazumdar, Advocate Mr. A.K. Dey, Advocate Ms. Rubal Bansal, Advocate Mr. Madhur Agarwal, Advocate Mr. Avro Mazumdar, Advocate For the Respondents: Ms. Smita Das De, Advocate DEBANGSU BASAK, J.:- The petitioner has challenged a notice under Section 148 of the Income Tax Act, 1961 dated April 7, 2010 and the Order dated November 26, 2010 passed by the authorities rejecting the objections of the petitioner. Learned Senior Advocate appearing for the petitioner has submitted that, the department has no reason to invoke Section 148 of the Act of 1961. He has questioned the assumption of jurisdiction under Section 147 read with Section 148 of the Act of 1961. According to him, al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Court to the fact that, the reasons for invocation of Section 148 of the Act of 1961 cannot be subsequently improved upon by either oral submissions or by the affidavit in opposition. He has relied upon 2016 Volume 384 Income Tax Report page 477 (Cal) (Ranglal Bagaria (HUF) v. Assistant Commissioner of Income-Tax Ors.), 2007 Volume 294 Income Tax Reports page 222 (Anil Kumar Bhandari v. Joint Commissioner of Income-Tax Ors.) and 2014 Volume 363 Income Tax Reports page 603 (Bom) (NDT Systems Anr. v. Income-Tax Officer Ors.) in support of such contentions. Referring to the letter dated September 17, 2010 issued by the petitioner, he has submitted that, such letter acknowledges a mistake. The same cannot form the basis of reopening an assessment under Section 148. The letter at best is a lament that, although the petitioner is entitled to claim their deductions, by mistake, it did not claim the same. Such a lament should not be construed to mean that, income has escaped assessment. Learned Advocate appearing for the respondent has referred to Section 147 of the Act of 1961. She has submitted that, the Assessing Officer has given the reasons why it has invoked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48 of the Act of 1961, which is impugned herein. Upon receipt of such notice, the petitioner by a writing dated April 28, 2010 sought the reasons for the invocation of Section 148 of the Act of 1961. The Assessing Officer communicated the reasons by a writing dated May 26, 2010. The petitioner by its writing dated August 12, 2010 raised objections thereto. By a writing dated September 17, 2010, the petitioner supplemented the objections. It issued another writing dated November 9, 2010 raising further objections. By the impugned order dated November 26, 2010, the Assessing Officer rejected the objections raised by the petitioner. The petitioner filed the instant writ petition on February 23, 2010. During the pendency of the writ petition, the Assessing Officer completed the assessment under Section 148 of the Act of 1961 and passed an Order thereon dated February 23, 2011. It is in this factual matrix that the present writ petition has come up for final hearing. It has been contended on behalf of the petitioner that, the Assessing Officer had erred in invoking Sections 147 and 148 of the Act of 1961 and that the factual matrix obtaining in the present case, in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 hereinbelow the relevant portion of Circular No.549 dated 31st October, 1989, ([1990] 182 ITR (St.) 1, 29), 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 court rulings in the past and was well settled and its omission from section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeds Limited (supra) has found that, the question of invocation of Section 148 of the Act of 1961 revolves around the interpretation to be given to Section 80IB(5) of the Act of 1961 read with Sub-section (2) therein dealing with an industrial undertaking. In the facts of that case, it has found that, all information regarding alleged manufacturing process of the assessee was before the Assessing Officer. It has held that, after the time limit for making assessment or reassessment having expired, the revenue cannot turn around, take recourse to an extraordinary provision which is Section 147 and attempt to reopen concluded assessment. In Debashis Moulik (supra), the authorities did not communicate to the assessee, the reasons for invoking Section 148 of the Act of 1961. In such circumstances, such notice was quashed. Consolidated Photo and Finvest Ltd. (supra) has held that, production of books of accounts or other evidence relevant to assessment does not necessarily amount to full and true disclosure within the meaning of Sections 147 and 148 of the Act of 1961. In the facts of that case, it has found that, there was no change in opinion by the Assessing Officer concerned. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him. However, according to the Assessing Officer in the proceeding under Section 147, the calculation of book profits is incorrect and that, the book profits claimed should be treated in a different way. According to the Assessing Officer, the computation done in the order of assessment is incorrect, resulting in escapement of income for assessment. The same, to my understanding, will constitute change of opinion. He had all the materials at the time of scrutiny assessment to form an opinion. He had done so as appearing in the order of assessment. There is no new material on record to suggest that, the assessee is guilty of suppression. Therefore, it cannot be said that, there are reasons for the Assessing Officer to arrive at a finding that, income has escaped assessment. The Assessing Officer, is trying to review his order of scrutiny assessment. In the facts of the present case, he is seeking to have a different opinion than that expressed in the order of scrutiny assessment, on the basis of the same materials. The same is not permissible. In such circumstances, the invocation of Section 147 of the Act of 1961 by the Assessing Officer is quashed. All steps taken consequent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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