TMI Blog2019 (9) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 148 is not permissible on a mere change of opinion. The Assessing Authority, in order to invoke the reassessment proceedings under Section 147/148, has to record reasons to believe about escapement of income in the hands of the Assessee. The parameters of powers under Section 147/148 have been discussed by the Apex Court and various High Courts in a large number of decisions and the latest in the series being in the case of CIT v. Kelvinator of India Ltd. ( 2010 (1) TMI 11 - SUPREME COURT ) which has been relied upon by the learned Tribunal to quash the reassessment in the present case - reassessment in the circumstances of the case was done merely based on a change of opinion at a subsequent stage and it was not permissible and set aside the same - Decided in favour of assessee. - Tax Case (Appeal) No.1441 of 2010 - - - Dated:- 6-9-2019 - Dr. Justice Vineet Kothari And Mr. Justice C. Saravanan For the Appellant : Mr.T.Ravikumar Senior Standing Counsel For the Respondent : Mr.Vikram Vijayaraghavan for M/s.Subbaraya Aiyar Padmanabhan JUDGMENT DR.VINEET KOTHARI, J. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the AO failed to notice an important item, viz., an amount of ₹ 6,70,758 which represented unpaid purchases. The assessee-firm had claimed expenses in respect of all purchases. However, an amount of ₹ 6,70,758 represented unpaid purchases. It is for this reason that the AO has come to the conclusion for issuance of notice under s.148 that the assesseefirm had suppressed an income to the extent of ₹ 6,70,758. Under Expln.1 to the proviso, mere production of account books from which material evidence could have been discovered by the AO will not necessarily amount to disclosure within the meaning of the proviso. Therefore, mere production of the balance sheet P L a/c or account books will not necessarily amount to disclosure within the meaning of the proviso. In the present case, the facts show that the AO overlooked the aforestated item. That, he noticed it subsequently. That, at the time of passing the original order of assessment, he could not be said to have opined on the above item. Therefore, there was no change of opinion. Therefore, in the present case, the impugned notice is sustained. 5. On the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perused the materials available on record. 8. The learned Tribunal, in its order dated 23rd July 2010, has assigned the following reasons for setting aside the re-assessment proceedings for the Assessment Year 2003-2004 which has been done within the time limit of four years without invoking the proviso to Section 147 of the Act. The relevant portion of the order passed by the Tribunal is quoted below for ready reference:- 5. We have considered the rival submissions. A perusal of the assessment order clearly shows that the original assessment had been completed u/s 143(3) of the Income Tax Act, 1961 on 17.3.2006. It is also noticed that the assessee has challenged the reopening. It is further noticed that the AO has overruled the assessee's objection regarding the validity of the reopening on the ground that the issue of the payment of royalty and technical know fees being treated as a capital expenditure had not been dealt with in the original assessment order and the reopening had been done within 4 years and consequently the proviso to section 147 was not applicable. A perusal of the order of the learned CIT(A) clearly shows that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble Supreme Court in the case of Kelvinator India Ltd., referred to supra, to hold that the AO has no power to review and has the power only to do reassessment and that the reopening done in the present case is on a change of opinion. In the circumstances, the finding of the learned CIT(A) on this issue stands confirmed. 6. In the result, the appeal of the Revenue is dismissed. 9. We are of the clear opinion that in the present facts and circumstances of the case, the judgments relied upon by the learned Senior Standing Counsel for the Revenue are not applicable. It is not the case of the Assessee of mere production of Books of Accounts and relevant information to the Assessing Authority, but, they have been given active and conscious consideration by the Assessing Authority. As far as the amount of payment of Technical Know-How Fee of ₹ 9,63,81,500/- is concerned, it is clear from the records that the said issue was considered not only by the Assessing Authority but, by the Transfer Pricing Officer also alongwith other expenditure incurred by the Assessee and it was found that it falls within the domai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld give arbitrary powers to the Assessing Officer to re-open assessments on the basis of mere change of opinion , which cannot be per se reason to reopen . We must also keep in mind the conceptual difference between power to review and power to reassess. The Assessing Officer has no power to review; he has the power to reassess. But reassessment has to be based on fulfilment of certain pre-condition and if the concept of change of opinion is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, review would take place. 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 1st April, 1989, Assessing Officer has power to re-open, 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
