TMI Blog2021 (4) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... veloper. In fact the assessment for the assessment year 2010-11 was made on the basis that the respondent/assessee was a developer. If that was so, the impugned proceeding initiated on the premise that the assessee was a works contractor and not the developer is only a change of opinion and therefore does not fulfill the essential requirements of Sections 147/148 of the Act. As speaking through the Hon'ble Chief Justice, opined that the concept of 'change of opinion' must be treated as an inbuilt limitation on the power of the Assessing Officer; that 'mere change of opinion' on consideration of the very same material does not give any ground to invoke Section 147 of the Act. In order to reopen the concluded assessment, there must be tangible material to come to the conclusion that there is escapement of income from assessment. These are the tests, which have to be satisfied before issuance of notice under Section 147/148 of the Act. Having regard to the aforesaid observations and considering the same, in the light of the impugned notice dated 15.3.2016, we find that the reasons recorded do not also indicate that there was any tangible material which was th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the respondent-assessee, which was impugned in the writ petition. For immediate reference the impugned notice is extracted as under:- NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 PAN: AACCK6097J/ACIT-GLB/2015-16 Office of the Assistant Commissioner of Income-tax, Circle-1, Aayakar Bhavan, Sedam Road, Gulbarga, Dated 15.03.2016. To M/S.KOTAKRI CONSTRUCTIONS PVT. LTD., 9-7-131/1, VENKATADRI UPSTAIRS, OPP: POLICE STATION, GANDHI GUNJ, BIDAR. Sir/Madam, Whereas, I have reasons to believe that your income chargeable to tax for the assessment year 2010-11 has escaped assessment within the meaning of section 147 of the Income Tax Act, 1961. 2. I, therefore, propose to assess/re-assess the income for the said assessment year and I hereby require you to deliver to me within 30 days from the service of this notice, a return in the prescribed form of your income for the said assessment year. 3. This notice is being issued after obtaining the necessary satisfaction of the Pr. Commissioner of Income Tax, Gulbarga. Yours faithfully, Sd/- (S.SHAKEER AHAMED) Asst. Commissioner of Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax and Others [(2012) 345 ITR 91]. 9. Being aggrieved by the order of the learned Single Judge, the Revenue has preferred this appeal. 10. Learned counsel for the appellant Sri. Sanmathi E.I., contended the learned Single Judge was not right in quashing the notice dated 15.3.2016 by holding that the notice was issued on account of 'change of opinion', it was not so. The said notice was issued while scrutiny of returns being made subsequent to processing of returns for the Assessment Year 2013-14. The reasons recorded in the notice would clearly indicate that it was not a pure change of opinion, but the object of issuing the said notice was in order to ascertain as to whether there had been any escapement of income and whether the assessee was entitled to deduction under Section 80IA (4) of the Act. He submitted that the judgments relied upon by the learned Single Judge in the case of Kelvinator of India Pvt. Ltd., and Sitara Diamond Pvt. Ltd., (supra) do not apply in the instant case. 11. Learned counsel for the appellants relied upon ESS Kay Engineering Co. (P) Ltd., Vs. Commissioner of Income Tax reported in 247 ITR 818 (SC) in support of his submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it clearly indicates that the assesseee is stated to be a 'works contractor and not developer' within the meaning of Section 80IA(4) of the Act and the assessee is not eligible to claim deduction under Section 80IA of the Act. Therefore, the question is, whether the aforesaid reason recorded would amount to a change of opinion or the same is in compliance of the requirements of Sections 147/148 of the Act. 18. In this regard, it would be useful to know that the assessee, while filing his returns had clearly disclosed that he was a developer and engaged in the development of infrastructural facilities including laying of roads and National Highways, buildings, etc., The assessment for the year 2010-2011 was also made on the basis that the assessee was a developer and not as a works contractor. In fact, at that stage, no such query was raised with regard to the returns filed by the assessee. It was only in the subsequent assessment year i.e. 2013-14, after completion of the said assessment the impugned notice dated 15.3.2016 was issued by recording that the assessee was a works contractor and not a developer. We find that the said reasons recorded in the impugned notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the reasons recorded dated 15.3.2016 we do not find anything to the effect that the assessee had not disclosed fully and truly all material facts or that the assessee had not disclosed the fact that he was a developer. In fact the assessment for the assessment year 2010-11 was made on the basis that the respondent/assessee was a developer. If that was so, the impugned proceeding initiated on the premise that the assessee was a works contractor and not the developer is only a change of opinion and therefore does not fulfill the essential requirements of Sections 147/148 of the Act. 23. In fact, a Full Bench of this Court in the case of Dell India (P.) Ltd. Vs. Joint Commissioner of Income Tax, Bangalore [2021] 123 taxmann.com 468 (Karnataka) disposed of on 27.1.2021 , considered Whether 'reason to believe' in the context of Section 147 of the Income Tax Act can be based on mere 'change of opinion' of the Assessing Officer? 24. After reviewing all the relevant decisions on the point, the Full Bench of this Court, speaking through the Hon'ble Chief Justice, opined that the concept of 'change of opinion' must be treated as an inbuilt limita ..... X X X X Extracts X X X X X X X X Extracts X X X X
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