TMI Blog2000 (2) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... on 148 of the Income-tax Act, 1961, to the petitioners, at this stage, prima facie, could be said to be based on "change of opinion" or on new opinion on finding out mistake upon the existing material or could it be said that there is total lack of jurisdiction ? The case of the petitioner in each petition is that the impugned notice is without jurisdiction, as reassessment cannot be made on the basis of "change of opinion" since all the relevant facts and entire material had been considered by the Assessing Officer, at the relevant time, whereas, the Revenue has contended that the assessee has claimed depreciation as deduction on non-existent machinery and a bogus claim was found and depreciation, thereon, claimed was not, consciously, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Line Tube Mill) amounting to Rs. 1,47,81,250 to Rajendra Group of Companies and claimed depreciation as deduction against its income in respect of machinery that either did not exist or the real worth of these machinery was only 10 per cent. to 20 per cent. of the value recorded in the books. In this way, the assessee has claimed bogus depreciation on non-existent machinery. Since the above amount of income appears to be escaped from taxable income for the assessment year 1996-97. It is mandatory to issue notice under section 148 of the Income-tax Act to cover the above income and tax the same accordingly, a notice under section 148 is, therefore, issued to the assessee for this purpose." It could very well be seen from the aforesaid re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 ITR 668. He placed reliance on relevant observations at page 673 which read as under : " 'Even the decision of this court in Garden Silk Mills Ltd. v. Deputy CIT (Asst.) (No. 1) [1996] 222 ITR 27 cannot assist the petitioner because in that case it was held that the Assessing Officer was aware about the investment and fluctuations in the exchange rate and depreciation had been allowed after considering the material on record and further that the notice was issued after four years and there was no failure on the part of the assessee to disclose material facts necessary for assessment. Reliance placed on the case of that very assessee, reported in the same volume at page 68---Garden Silk Mills Ltd. v. Deputy CIT (No. 2) [1996] 222 ITR 68 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inciples noticed above. No return has been filed, However, the reasons recorded by the Assessing Officer has been placed on record which are identical in all the three cases except for, the amount and the name of the assessee." We have also, seriously, considered the entire case law from which aforesaid paragraphs are relied on. In so far as the expressions "reason to believe" and "change of opinion" are concerned, we are of the view that though the material was available on record, at the time of first assessment, when no conscious consideration of the material is made and a mistake has been committed take has been committed, it would not, in any case, create an embargo or a ban on the competent officer to exercise powers under the amend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the competent authority is required to examine the merits after giving an opportunity of hearing to the assessee, and material, it may be observed that the observations made, hereinbefore, may not come in the way of the point/issue being decided on the merits as ours is a prima facie view in the absence of material. In fact, this requires no clarification, as such. However, this court has dealt with the point prima facie, at the interim stage, i.e., at the stage of issuance of notice under section 148 of the Income-tax Act, where the party has to appear and show cause, the decision on the merits will be upon the material that may be placed/submitted. So, the observations made, at this stage, obviously, would not and should not influence an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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