TMI Blog2021 (6) TMI 825X X X X Extracts X X X X X X X X Extracts X X X X ..... re was no new or tangible material before the AO to initiate reassessment proceedings u/s. 147 of the Act. We are unable to see application of mind by the AO of the materials available before him. The AO has not recorded any basis or factum gathered by him after application of mind of the assessment already completed which could reflect that before initiation of reassessment proceedings u/s. 147 of the Act, he applied his mind and thereafter reached to a conclusion that he had reasons to believe that income chargeable to tax has escaped assessment within the meaning of section 147 of the Act empowering him to issue notice u/s. 148 - Decided in favour of assessee. - T.C.A.No.321 of 2021 - - - Dated:- 22-6-2021 - Hon'ble Mr. Justice M.Duraiswamy And Hon'ble Mrs.Justice R.Hemalatha For the Appellant : Mr.Karthik Ranganathan, Senior Standing Counsel For the Respondent : Mr.Anand for M/s.PASS Associates JUDGMENT M.DURAISWAMY, J. Challenging the order passed in I.T.A.No.2872/Mds/2016 in respect of the Assessment Year 2008-09 on the file of the Income Tax Appellate Tribunal, A Bench, Chennai, the Revenue has filed the above appeal. 2.The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.Kelvinator India Ltd., when no change of opinion could be alleged on a factual situation? (iv)Whether on the facts and circumstances of the case and in law, the Hon'ble Income Tax Appellate Tribunal was right in allowing assessee's claim of deduction u/s 24(b) beyond the monetary ceiling prescribed under that Section? (v)Whether on the facts and circumstances of the case and in law, the Hon'ble Income Tax Appellate Tribunal was right in following the decision of the Hon'ble High Court in the case of Usha International Ltd when the first proviso to Section 147 clearly stipulates that no assessment under Section 147 can be initiated under the circumstances provided therein only after the expiry of four years from the end of the relevant assessment year? 4.Mr.Karthik Ranganathan, learned senior standing counsel appearing for the appellant-Revenue submitted that the 1st question of law alone is sufficient to be decided in the appeal and further fairly submitted that the 1st question of law has already been decided against the Revenue by the Hon'ble Supreme Court in the judgment reported in [2010] 187 Taxman 312 (SC) [Commissioner of Income-Tax, De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to as the relevant assessment year). [Emphasis supplied] 3.2.After the Amending Act, 1989 , section 147 reads as under : 147. Income escaping assessment. -If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153 , assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year). [ Emphasis supplied] 4.On going through the changes, quoted above, made to section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987 , re- opening could be done under above two conditions and fulfilment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act [with effect from 1-4-1989], they are gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 these fears, the Amending Act, 1989 , has again amended section 147 to reintroduce the expression 'has reason to believe' in place of the words 'for reasons to be recorded by him in writing, is of the opinion'. Other provisions of the new section 147, however, remain the same. [Emphasis supplied] 5.For the aforestated reasons, we see no merit in these civil appeals filed by the Department, hence, dismissed with no order as to costs. Further, the learned senior standing counsel submitted that the issue was also decided by the Hon'ble Division Bench of this Court in the judgment reported in [2020] 118 taxmann.com 99 (Madras) [Commissioner of Income-Tax, Chennai Vs. India Cements Ltd.], wherein the Division Bench held as follows: ... 30.Having held so, we need to consider as to whether the reassessment was validly done. The Tribunal held in favour of the assessee stating that the reassessment was bad in law. To decide this issue, we may straightawa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee. There was no fresh or tangible material available with the Assessing Officer to reopen the proceedings. Therefore, we have no hesitation to conclude that the reopening of the assessment beyond four years was clearly a case of change of opinion. For all the above reasons, substantial questions of law Nos. 1 to 3 are liable to be answered against the Revenue and consequently, it is held that the reopening of the reassessment is bad in law and is liable to be set aside. 33.Accordingly, the appeal filed by the Revenue is dismissed. The re-assessment order dated 31-3-2004 is set aside. Substantial questions of law Nos. 1 to 3 are answered against the Revenue. As we have answered substantial questions of law Nos.1 to 3 against the revenue, there would be no necessity for us to answer the substantial question of law No. 4 and the said question is left open. No costs. 5.Mr.Anand, learned counsel appearing for the respondent submitted that in view of the judgments of the Hon'ble Supreme Court and the Division Bench of this Court, the 1st question of law has to be decided against the Revenue and in favour of the assessee. 6.Having regard to the submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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