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TMI Blog2022 (1) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons for reopening and it is settled law that Revenue cannot improve upon the reasons in its oral argument or affidavit in reply as held in First Source Solutions Limited vs. The Assistant Commissioner of Income Tax in Writ Petition No.2762/19 dated 31/8/2021. Reasons for reopening and assessment has to be decided/examined only on the basis of the reasons recorded at the time of issuing notice under Section 148 of the Act seeking to reopen the assessment. These reasons cannot be improved upon and/or supplemented and much less substituted by affidavit and/or oral submissions. 3. Having considered the reasons for reopening provided to petitioner, we are satisfied that it is nothing but a mere change of opinion. It is settled law that the Assessing Officer has no power to review an assessment which has been concluded. 4. In this case petitioner had filed its return of income for Assessment Year 2014-2015 on 11/9/2014 declaring total income of Rs. 1,58,27,930/- Thereafter, petitioner had filed revised return of income for Assessment Year 2014-2015 on 31/3/2015 declaring total income of Rs. 1,58,27,930/-. Assessment was completed under section 143(3) of the Act on 15/12/2016 and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2006) 281 ITR 394 (Delhi), Mr. Sharma submits that a mere change of opinion cannot be a basis for reopening. Computed assessment would be applicable only to situation where the Assessing Officer has applied his mind and taken conscious decision on a particular matter in issue. 8. Delhi High Court in KLM Royal Dutch Airlines vs. Assistant Director of Income- Tax 2007 SCC Online Del 1785 has observed that decision in Consolidated Photo and Finvest Ltd. (supra) must be held not to lay down correct law. Paragraph 15 reads as under: "15. The Full Bench of this Court in Commissioner of Income-Tax v. Kelvinator of India Ltd. [2002] 256 ITR 1 had opined that the amendments introduced into Section 147 with effect from 1.4.1989 have not altered the position that a mere change of opinion of the AO was not sufficient ground for embarking on a reassessment. Calcutta Discount was duly considered and applied by the Full Bench. The Full Bench further observed that an order of assessment must be presumed to have been passed by the AO concerned after due and proper application of mind. In these circumstances the decision of the Division Bench in Consolidated Photo and Finvest Ltd. v. Assistant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being any new or additional material available to the Assessing Officer. We may refer to the decision of the Gujarat High Court in the case of Gujarat Power Corporation Ltd. v. Asst. CIT, (2013) 350 ITR 266, in which following observations were made :- "41. The powers under section 147 of the Act are special powers and peculiar in nature where a quasi-judicial order previously passed after full hearing and which has otherwise become final is subject to reopening on certain grounds. Ordinarily, a judicial or quasi-judicial order is subject to appeal, revision or even review if statute so permits but not liable to be reopened by the same authority. Such powers are vested by the Legislature presumably in view of the highly complex nature of assessment proceedings involving a large number of asses-sees concerning multiple questions of claims, deductions and exemptions, which assessments have to be completed in a time fame. To protect the interests of the Revenue, therefore, such special provisions are made under section 147 of the Act. However, it must be appreciated that an assessment previously framed after scrutiny when reopened, results into considerable hardship to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Irrespective of this, in a given case, if the Assessing Officer on his own for reasons best known to him, chooses not to assign reasons for not rejecting the claim of an assessee after thorough scrutiny, it can hardly be stated by the Revenue that the Assessing Officer cannot be seen to have formed any opinion on such a claim. Such a contention, in our opinion, would be devoid of merits. If a claim made by the assessee in the return is not rejected, it stands allowed. If such a claim is scrutinized by the Assessing Officer during assessment, it means he was convinced about the validity of the claim. His formation of opinion is thus complete. Merely because he chooses not to assign his reasons in the assessment order would not alter this position. It may be a non-reasoned order but not of acceptance of a claim without formation of opinion. Any other view would give arbitrary powers to the Assessing Officer. 43. We are, therefore, of the opinion that in a situation where the Assessing Officer during scrutiny assessment, notices a claim of exemption, deduction or such like made by the assessee, having some prima facie doubt raises queries, asking the assessee to satisfy him with res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... believe that income chargeable to tax has escaped assessment. However, as observed by the Supreme Court in the case of CIT vs. Kelvinator India Limited 320 ITR 561 in the context of Sections 147/148 of the Act that reason to believe found therein does not give arbitrary powers to reopen an assessment. The concept of change of opinion is excluded/omitted from the words reason to believe. Thus a change of opinion would not be reason to believe that income chargeable to tax has escaped assessment. Besides the power to reassess is not a power to review. Further reopening must be on the basis of tangible material. 12) Therefore the power to reassess cannot be exercised on the basis of mere change of opinion i.e. if all facts are available on record and a particular opinion is formed, then merely because there is change of opinion on the part of the Assessing Officer notice under Section 147/148 of the Act is not permissible. The powers under Section- 147/148 of the Act cannot be exercised to correct errors/mistakes on the part of the Assessing Officer while passing the original order of assessment. There is a sanctity bestowed on an order of assessment and the same can be disturbed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ginally passing assessment order dated 12 October 2010. This by itself demonstrates the fact that notice dated 28 March 2013 under Section 148 of the Act seeking to reopen assessment for A.Y. 2008-09 is based on mere change of opinion. However, according to Mr. Chhotaray, learned Counsel for the revenue the aforesaid issue now raised has not been considered earlier as the same is not referred to in the assessment order dated 12 October 2010 passed for A.Y. 2008-09. We are of the view that once a query is raised during the assessment proceedings and the assessee has replied to it, it follows that the query raised was a subject of consideration of the Assessing Officer while completing the assessment. It is not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. If an Assessing Officer has to record the consideration bestowed by him on all issues raised by him during the assessment proceeding even where he is satisfied then it would be impossible for the Assessing Officer to complete all the assessments which are required to be scrutinized by him under Section 143 (3) of the Act. Moreover, one mu ..... 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