9911796707
TMI Blog2023 (3) TMI 1245X X X X Extracts X X X X X X X X Extracts X X X X ..... s.7,40,180/-. According to the petitioner, the return of the petitioner was processed and the case was selected for scrutiny, as a result of which, notice under Section 142(1) was issued on 23rd August, 2017 calling upon the petitioner to furnish specific details relating to increase in share capital along with confirmation and ITR of the persons from whom the same was received, the premium received on shares during the year along with the name, PAN, address and confirmation of persons from whom the premium has been received. Such details were called for by way of aforesaid notice to which the petitioner has filed a detailed reply on 5th September, 2017. 3. According to the petitioner the Assessing Officer, after having arrived at a satisfaction, has not made any addition on the said issue which was specifically explained by the petitioner, and later on, an assessment order under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") was passed on 6th November, 2017 accepting the returned income of the petitioner. Despite the aforesaid circumstance, according to the petitioner, the respondent authority has issued notice under Section 148 of the Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and as such, even after considering the said issue, the Assessing Officer has thought it fit not to make any addition, and as such, this entire action of reopening of assessment is based upon the change of opinion which is also in conflict with well recognized proposition of law as laid down in the case of Premium Finance (P.) Ltd. vs. Asst. CIT, reported in (2016) 73 taxman.com 369 as well as the decision in the case of Gujarat State Board of School Textbooks vs. Asst. CIT, reported in (2016) 75 taxman.com 281, and as such, considering the aforesaid well settled proposition, the learned advocate has contended that impugned order as well as the notice deserve to be quashed and set aside. 7. The learned advocate for the petitioner has further submitted that apart from this, even this reopening which is sought for is beyond the period of four years from the end of assessment year and there was no failure on the part of the assessee to truly and fully disclose the material facts, and as such, when all facts related to issuance of share and consequential premium etc. have been disclosed before the Assessing Officer during the original scrutiny, now it is not proper on the part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , but then could not withstand to the circumstance that the very notice which was issued under Section 142(1) of the Act dated 23rd August, 2017 was referred to in an assessment order and also could not controvert the fact that it was not a specific case of the Department that there is a failure on the part of the assessee since the reopening is beyond the period of four years and has submitted that the facts are such where the petition may not be entertained. The learned advocate for the Revenue has not been able to confront with the proposition which has already been propounded in the case of very same assessee, i.e. the petitioner herein reported in (2023) 146 taxmann.com 193 (Gujarat), and as such, has left it to the discretion of the Court. No further submissions have been made. 11. Having heard the learned advocates appearing for the parties and having gone through the materials on record, at the very first instance, it appears that the notice dated 23rd August, 2017 issued under Section 142(1) of the Act reflecting on Page-31 contains certain queries, in which, Query No.3 specifically requires details about the share capital increased during the year along with confirmation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st go on repeating the exercise of examining the issue which has already been gone into. There appears to be no tangible material distinct from what was made a part of the assessment proceedings and, therefore, reopening of the assessment is not permissible. The proposition of law is aptly clear, as stated above and, therefore, in our opinion, permitting the authority to reopen the assessment would not be valid. We cannot shut our eyes over the aforesaid circumstance simply because it is within the period of four years and having regard to the decisions of Apex Court which propounded that the Courts would be failing to perform their duty, if reliefs were refused without adequate reasons, we see that the action on the part of the respondent authority is impermissible in view of aforesaid set of circumstance. The observations made by the Apex Court in case of Calcutta Discount Co. Ltd. v. ITO reported in [ 41 ITR 191 at page 195 head-note (v) are worth to be reproduced hereafter: "That though the writ of prohibition or certiorari would not issue against an executive authority, the High Courts had power to issue in a fit case an order prohibiting an executive authority from acting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion for such like made by the assessee having some prima facie doubt raises queries asking the assessee to satisfy him with respect to such a claim thereafter, does not make any addition in the financial year of assessment. It can be stated to have form an opinion whether or not in the financial year he give his reason for making addition and after forming an opinion on the issue, the Court further held that any such reopening would be based on a mere change of opinion cannot be reopened simply because the Assessing Officer did not record reasons for making no disallowance on such claim of exemption would be of a no consequence. 16. Considering this overall set of circumstances coupled with the fact that there is no other tangible material available to justify the reopening more particularly when the issue has been gone into in detail during the course of regular scrutiny assessment, it is hardly justify for the revenue to reopen the issue which has relied upon, examined and even if it is within a period of four years. The ratio laid down by the aforesaid decision referred to above would clearly clinch the issue and therefore, the action of revenue in reopening the assessment is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tand obliterated after the substitution Section 147 of the Income Tax Act, 1961 by Direct Tax Laws (Amendment) Act, 1987 and 1989. After the amendment, the Assessing Officer has to have reason to believe that income has escaped assessment, but this does not imply that the Assessing Officer can reopen an assessment on mere change of opinion. The concept of "Change of Opinion" must be treated as an inbuilt test to check the abuse of power. Hence, after April 1, 1989, the Assessing Officer has power to reopen an assessment, provided there is "tangible material" to come to the conclusion that there was escapement of income from assessment. Reason must have a link with the formation of the belief." 14. Further, the contention with regard to escapement of income being assessed, the respondent-authority has hardly made out any case for invoking the provisions of Section 56(1) or Section 68. Since the entire exercise is sought to be undertaken on the basis of change of opinion, simply because the Assessing Officer, while passing an order of assessment, has not dealt with specifically in an elaborate form, would not be a ground for opening of an assessment. At this stage, we deem it prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, of course at the hands of the revenue. This obviously would lead to considerable hardship and uncertainty. It is precisely for this reason that even while recognizing such powers, in special requirements of the statute, certain safeguards are provided by the statute which are zealously guarded by the courts. Interpreting such statutory provisions courts upon courts have held that an assessment previously framed cannot be reopened on a mere change of opinion. It is stated that power to reopening cannot be equated with review. 42. Bearing in mind these conflicting interests, if we revert back to central issue in debate, it can hardlybe disputed that once the Assessing Officer notices a certain claim made by the assessee in the return filed, has some doubt about eligibility of such a claim and therefore, raises queries, extracts response from the assessee, thereafter in what manner such claim should be treated in the final order of assessment, is an issue on which the assessee would have no control whatsoever. Whether the Assessing Officer allows such a claim, rejects such a claim or partially allows and partially rejects the claim, are all options available with the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not in the final order he gives his reasons for not making the addition." 9. In view of aforesaid circumstances, and in addition thereto, it is further appearing to us that the ratio laid down by the Apex Court in the case of Kelvinator of India Ltd. (supra) is also governing the controversy in question and, therefore, the relevant extract of catch-note of this decision worth to be taken note and therefore reproduced hereafter: "The concept of "change of opinion" on the part of the Assessing Officer to reopen an assessment does not stand obliterated after the substitution of section 147 of the Income-tax Act, 1961, by the Direct Tax Laws (Amendment) Acts, 1987 and 1989. After the amendment, the Assessing Officer has to have reason to believe that income has escaped assessment, but this does not imply that the Assessing Officer can reopen an assessment on mere change of opinion. The concept of "change of opinion" must be treated as an in-built test to check the abuse of power. Hence after April 1, 1989, the Assessing Officer has power to reopen an assessment, provided there is "tangible material" to come to the conclusion that there was escapement of income from assessment. R ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
