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TMI Blog2022 (5) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment completed u/s. 143(3) on 10.12.2015 and, therefore, the initiation of proceedings u/s. 147 is due to change of opinion. In this connection the appellant rely on the Supreme Court decision in the case of CIT Vs Kelvinator Indian Ltd. (320 ITR 561) and Delhi High Court decision the case of CIT Vs Jagson International Ltd. (321 ITR 544). 4. The CIT(A) erred in not appreciating the fact that there was no fresh materials before the Assessing Officer to initiate the proceedings u/s. 147 and that the reopening of the assessment was due to reappraisal of the facts already on record. 5. The CIT(A) erred in partly confirming the disallowance made u/s. 36(1)(iii). 6. The CIT(A) erred in not appreciating the fact that the interest paid related to capital borrowed for the purpose of business. 7. The Assessing Officer erred in not appreciating the fact that making investments in shares is part of the appellant's business activity. 8. The Assessing Officer erred in disallowing interest u/s. 36(1)(iii) under a different computation in the order u/s. 143(3) r.w.s. 147 dated 29.12.2017 in respect of investments in shares and share application money, as the Assessing Officer h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 169 (2013) is also applicable to our case. 2.1. After considering the submissions of the assessee, the Assessing Officer has noted that the assessee has classified its investments in shares under 'Investments' in Business and in this factual matrix, the assessee's investment in shares, the income from which is exempt, certainly calls for disallowance under section 14A of the Act of the expenditure incurred relating to such investments. Accordingly, the Assessing Officer determined the disallowance under section 14A r.w. Rule 8D of Rs. 48,16,523/- and after reducing the disallowance made by the assessee, the balance amount of Rs. 35,55,637/- was disallowed and brought to tax. 2.2. Subsequently, the Assessing Officer has issued a notice under section 148 of the Act dated 06.05.2016 for reopening of assessment. The reasons recorded for reopening of assessment are as under: "The reasons recorded for reopening of assessment in your case for the A.Y 201-14 is as under: "On perusal of the Balance Sheet, it is found that the own capital is available only to an extent of Rs. 2,09,33,691/-. The excess value of loan received over and above loans advances is Rs. 24,21,45,860 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8D. Again, reopening of the assessment under section 147 of the Act for the same reasoning is not valid. He has further pointed out from the rebuttal of the Assessing Officer communicated to the assessee vide his letter dated 08.03.2017 and argued that there is no new tangible material available with the Assessing Officer and complete details such as balance sheet, profit and loss account, etc. were filed by the assessee and were available in the file of the Assessing Officer himself. Since there is no tangible material came to the notice of the Assessing Officer, subsequent re-assessment under section 147 of the Act is invalid. 5. On the other hand, the ld. DR has submitted that there is incorrect arithmetic applied by the Assessing Officer in the original order of assessment under section 143(3) of the Act and in order to correct the mistake crept in the original assessment order, the assessment under section 143(3) of the Act was reopened under section 147 of the Act. Therefore, the Assessing Officer has rightly passed the reassessment under section 143(3) r.w.s. 147 of the Act. 6. We have heard both the sides, perused the materials available on record and gone through the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfers jurisdiction to re- open the assessment. Therefore, post-1st April, 1989, power to re-open is much wider. However, 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 re-open assessments on the basis of "mere change of opinion", which cannot be per se reason to re-open. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to re-assess. But reassessment has to be based on fulfilment of certain pre-condition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April, 1989, Assessing Officer has power to re-open, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o review an order as held by the Apex Court in CIT v. Kelvinator of India Ltd. (2010) 320 ITR 561;" Xxxxxxxxxxxxxx xxxxxxxxxxxxxx "6. We have considered the rival submissions. It is a settled position in law that the power to reopen an assessment within a period of four years from the end of the relevant assessment year, even when the assessment has been made under Section 143(3) of the Act, is not curtailed by the proviso to Section 147 of the Act. Therefore, even where an assessee has disclosed all material facts truly and fully for assessment and assessment is completed under Section 143(3) of the Act, the reopening is permissible within a period of four years from the end of the relevant assessment year. The only condition precedent for exercising the jurisdiction to reopen an assessment, is the Assessing Officer should have reasonable belief that income chargeable to tax has escaped assessment. This reason to believe that income chargeable to tax has escaped assessment should not be on the basis of change of opinion, as otherwise the power of reassessment would become a power of review, which it is not." 6.4. Against the above decision of the Hon'ble Bombay High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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