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TMI Blog2022 (8) TMI 1264X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing officer of account books or other evidence from which material evidence could with due diligence have been discovered by assessing officer will not necessarily amount to disclosure within meaning of the provision to section 147.?" 3. The assessee is an individual. Her return for AY 2008-09 was filed electronically on 30.09.2008 declaring income of Rs. 16,91,56,944/-. After initial processing under section 143(1) of the Income Tax Act, 1961 (the "Act"), the assessment under section 143(3) of the Act was completed on 31.08.2010 accepting the returned income. Subsequently, the assessment was reopened and notice under section 148 of the Act was issued on 10.02.2014. In response, the assessee filed letter dated 08.10.2014 stating that the original return filed be treated as the return filed in response to notice under section 148 of the Act. 3.1 After obtaining the reasons recorded for reopening the assessment, the assessee filed objections to the initiation of proceedings under section 147 of the Act. The Ld. Assessing Officer ("AO") disposed off the same vide order dated 26.03.2015 and completed the assessment on 30.03.2015 under section 148 read with section 143(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been given an option to treat the income from sale of shares under a particular head on a consistence basis; ix. The appellant has relied upon a number of judgments on all the above issues which are found relevant to the case and are in the favour of the appellant; On the basis of above arguments, I am of the opinion that the AO did not have any new material/information in his possession at the time of reopening the assessment and the same was done merely due to change in opinion in respect of the treatment of income arising out of sale of shares which has been consistently being shown by the appellant and is being accepted by the department as income under the head capital gains. In view of this, the reopening of the assessment u/s 147 of the Act is treated as ab initio void and on merits too, it is held that the AO did not have any rationale to deviate from the consistent position taken by the department. Therefore, on merits also, the addition made is deleted." 5. The Revenue is in appeal before the Tribunal challenging the findings of the Ld. CIT(A) and all the three grounds of appeal relate thereto. 6. The Ld. DR supported the order of the Ld. AO. He submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment order dated 31.08.2010 under section 143(3) so as to confer jurisdiction in terms of section 147 of the Act. The Ld. AR relied on several case laws in support of his arguments. 8. We have considered the rival submissions carefully and perused the material available on records. The issue for our consideration is whether assumption of jurisdiction for re-assessment by invoking the provisions of first proviso to section 147 of the Act by the Ld. AO is valid in the eye of law. The provision of first proviso to section 147 of the Act reads as under:- "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:" 8.1 A bare reading of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of shares were undertaken by the assessee. 9.1 The assessee filed objection (page 43-44 of the Paper Book) stating that the assessee was an investor in shares and proper records were maintained for the transactions incurred during the year. During assessment proceedings, calculation and copy of accounts were submitted for verification of LTCG/STCG. There was no Tax Audit Report as there was no business turnover. The assessee had purchased shares of one company only by 11 transactions and sales in 23 transactions only of the same company during the year so it cannot be said that assessee has frequent and voluminous transactions. 9.2 It was further stated that the case of the assessee was under scrutiny for continuously three assessment years i.e. AY 2007-08, AY 2008-09 and AY 2009-10 and in all these years, the income of the assessee was assessed under the head 'capital gain' only. There is no change in the status of the case and all the information was already submitted. There is no material information with the Ld. AO to establish escapement of income by the assessee. If the income is reassessed as business income it is merely a case of change of opinion and cited the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same material cannot be a ground for valid and proper initiation of reassessment proceedings. 10. Much stress has been laid by the Revenue on the principle of res-judicata which does not apply to income-tax proceedings. Suffice is to say that when the facts are not different it is necessary to maintain consistency as held by the Hon'ble Supreme Court in Union of India vs. Kumudini Narayan Dalal 249 ITR 219 (SC) and CIT vs. Narendra Doshi 254 ITR 606 (SC). 11. The contention of the Revenue that Explanation I to section 147 has been overlooked is devoid of any merit. The provisions contained in the present Explanation I were contained earlier in the then Explanation 2 prior to substitution of section 147 w.e.f. 01.04.1989. While interpreting the Explanation 2 the Hon'ble Calcutta High Court in Imperial Chemical Industries Ltd. vs. ITO 111 ITR 614 (Cal) observed that what the Explanation II refers to are voluminous account books and similar other documents which requires very careful scrutiny and from which material evidence cannot be discovered inspite of due diligence being exercised. Such is not the case of the assessee before us. On the contrary, facts reveal that books of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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