TMI Blog2022 (1) TMI 945X X X X Extracts X X X X X X X X Extracts X X X X ..... this year have been initiated despite the fact that the details in connection with the reasons for re-opening were already furnished for Assessment Year 2012-13 no disallowance were made in the assessment order regarding interest inventorization and the same was accepted by the Assessing Officer towards deductibility of interest expense Thus, the reasons for re-opening the assessment of the relevant year were based on the details furnished in the assessment proceedings of Assessment Year 2012-13. Merely, if some other decision has been taken by the Department for other years i.e., Assessment Year 2013-14 and Assessment Year 2014-15, the respondent authorities do not retain the power to review the order of Assessment Year 2012-13 in the garb of re-opening under Section 147 of the Act. Thus, on change of opinion and reviewing its own order is bad in law and without jurisdiction. In our view, re-opening of the assessment without any basis and merely change of opinion is not permissible while exercising powers under Section 147 r/w Section 148 In the present case, the reasons which have been recorded by the assessing officer for reopening of the assessment do not disclose that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revised return declaring total income of ₹ 120,94,29,942/- on 31 March 2014. 4. Thereafter, on 22 December 2014, a notice under Section 143(2) of the Act was issued to the petitioner calling upon the petitioner to attend the office of the Assessing Officer and produce the copies of balance sheet, profit and loss account, computation of income and audit report etc. The petitioner responded by its letters dated 12 February 2015, 23 March 2015, 24 March 2015 and 30 March 2015 and provided requisite information and details with the supporting documents asked for. Subsequently, assessment order dated 31 March 2015 under Section 143(3) of the Act was passed by the Assessing Officer. 5. On 15 October 2015, the petitioner moved an application for rectification under Section 154 of the Act before the then Assessing Officer seeking to rectify certain mistakes in the order dated 31 March 2015. The Assessing Officer vide his order dated 03 November 2015 was pleased to rectify the assessment order dated 31 March 2015. 6. Thereafter, the Assessing Officer issued a notice dated 27 March 2019 under Section 148 of the Act to the petitioner seeking to reopen the assessment for the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also a periodic fixed cost. However, the assessee has allocated the salary cost to the work in progress which is directly related to the project. Thus, the treatments given by the assessee to expenses are contradictory to each other. It is not out of the place to state that the assessee had not followed the correct method of accounting for accounting the expenses towards the project being developed by the assessee. Thus, the entire interest expenses have to be carried over to the work in progress and shall be allowable as deduction in the year in which the revenue pertaining to the said interest shall be offered for taxation. The above view is fully supported by the judgment of Hon ble Special Bench Mumbai in the case of M/s. Wall Street Construction Limited [102 TTJ 505] wherein the Hon ble Bench has held that the interest cost shall be debited to work in progress and allowed to be claimed as deduction only in the year in which corresponding income is offered to tax. Proviso to Section 36(1)(iii) as under: Provided that any amount of the interest paid, in respect of capital borrowed for acquisition of an asset for extension of existing business or profession (whether ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued on 27 March 2019, the assessment pertaining to the year 2012-13 was sought to be re-opened after the lapse of four years and assessment under Section 143(3) has been completed. First proviso to Section 147 applies when the re-assessment proceedings are initiated after four years from the end of the relevant assessment year. The said proviso reads as under:- Provided that where an assessment under sub section (3) of Section 143 or this Section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: 11. The question is whether there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of Assessment Year 2012-13. It is not the case that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws an inference which appears subsequently to be erroneous, mere change of opinion with regard to that inference would not justify initiation of action for reopening assessment. 12. In this context, the legal position is well settled. A profitable reference can be made to the judgement of the Delhi High Court in the case of CIT vs. Kelvinator of India Limited, (2002) 256 ITR 1 (Delhi) (FB) wherein, it was enunciated that a mere change of opinion cannot form the basis of reopening a completed assessment. 13. Similarly, a Division Bench of this Court in the case of Ananta Landmark Private Limited Vs. Deputy Commissioner of Income Tax and others, W.P. No. 2814 of 2019, dated 14 September 2021 , on which reliance was placed on behalf of the petitioner, illuminates the path. In this case, after taking survey of the previous pronouncements it was enunciated that when the primary facts necessary for assessment are fully and truly disclosed, the assessing officer is not entitled on change of opinion to commence proceedings for reassessment. We may usefully refer to paragraph 16 of the aforesaid judgement, which reads thus: 16. Whether it is a disclosure or not within the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised too many legal inferences from the facts disclosed, on that account the Assessing Officer, who has decided to reopen assessment, is not competent to reopen assessment proceedings. Where on consideration of material on record, one view is conclusively taken by the Assessing Officer, it would not be open to reopen the assessment based on the very same material with a view to take another view. As noted earlier, petitioner has filed the annual returns with the required documents as provided for under Section 139 of the Act. As held by the Calcutta High Court in Income Tax Officer V/s. Calcutta Chromotype (P.) Ltd., (1974) 97 ITR 55 (Calcutta) relied upon by Mr. Pardiwalla, there was nothing more to disclose and a person cannot be said to have omitted or failed to disclose something when, of such thing, he had no knowledge. One cannot be expected to disclose a thing or said to have failed to disclose it unless it is a matter which he knows or knows of. In this case, except for a general statement in the reasons for reopening, the Assessing Officer has not disclosed what was the material fact that petitioner had failed to disclose. 14. In the case of Bhavesh Develop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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