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TMI Blog2022 (1) TMI 946X X X X Extracts X X X X X X X X Extracts X X X X ..... 22nd June, 2021 rejecting petitioner's objections. 2. The re-opening is proposed to be made within four years of the end of the relevant assessment year. In such a situation even though proviso to Section 147 of the Act would not apply, and the Assessing Officer has to only make out availability of tangible material, it is settled law that if the reopening is based on mere change of opinion, the notice issued under Section 148 of the Act has to be set aside. Paragraph No.12 of the judgment dated 23rd November, 2021 Reserve Bank Officers Co-operative Credit Society Ltd. vs. The Income Tax Officer - 17(3)(1) and Ors. Writ Petition No. 3332 of 2019 (unreported) reads as under: 12. Section 147 enables the Assessing Officer to assess or reass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n CIT v. Kelvinator of India Ltd. held thus (page 564): "... one needs to give a schematic interpretation to the words 'reason to believe' failing which, we are afraid, section 147 would give arbitrary powers to the Assessing Officer to reopen assessments on the basis of 'mere change of opinion', which can-not 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 the fulfillment of certain pre-conditions. If the concept of 'change of opinion' is removed, as contended on behalf of the Department, then the review would take place in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a reason to believe that income chargeable to tax has escaped assessment has not been met. 4. We have to also note that after the information on 20th January, 2019 was received, as noted in the assessment order dated 21st December, 2019 five notices were issued by the Assessing Officer under Section 142(1) of the Act. In the notice dated 1st October, 2019 a specific query has been raised by which petitioner was called upon to provide party wise details alongwith address of the parties to whom loan and advances were given and details of interest received on such loans and also furnish the nature of the loans/advances. Petitioner responded by its letter dated 8th November, 2019 and 14th November, 2019. In the reply dated 14th November, 2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argeable to tax has escaped assessment. 6. There can be no doubt in the facts of the present case that the issue of loan being given to group companies either at low interest rate or no interest rate was a subject matter of consideration by the Assessing Officer during the original assessment proceedings. It would therefore, follow that the re-opening of the assessment is merely on the basis of change of opinion of JAO from that held during the course of assessment proceedings leading to the assessment order dated 21st December, 2019. This change of opinion does not constitute justification and/or reason to believe that income chargeable to tax has escaped assessment. 7. According to the JAO, survey report submitted by DDIT investigation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this account. The respondents contend that the assessee-company should have received an interest income worth approximately income worth approximately Rs. 3 lakhs if interest had been charged on this advance. Hence, this interest income of approximately Rs. 3 lakhs has escaped assessment. Once again the reason which is recorded is beyond the scope of section 147. It is an accepted position that the assessee-company has in fact not received any interest in respect of this advance from M/s. C. R. Developers (P) Ltd. in the assessment year 1988-89. When no income is received there is no question of paying any tax on income which the respondents think, should have been received but was in fact not received. In the case of CIT v. A. Raman and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the assessee. There was also nothing on record to show that the alleged interest was not reflected in the accounts. The only finding recorded was that the assessee "ought to" have charged interest. Referring to an earlier decision of the Guwahati High Court, in Highways Construction Co. (P.) Ltd. v. CIT [1993] 199 ITR 702, the Court observed that their attention had not been invited to any provision of the Income-Tax Act empowering the income-tax authorities to include in the income, interest which was not due or not collected. 6. In similar vein, when we asked Mr Sahni, who is appearing for the respondent to point out some provision of the Income Tax Act, whereunder such 'notional' interest could be made the subject matter of tax, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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