TMI Blog2024 (3) TMI 1158X X X X Extracts X X X X X X X X Extracts X X X X ..... should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. Therefore, the reopening of the assessment, in our view, is merely on the basis of change of opinion of the AO from that held earlier during the course of assessment proceedings and this change of opinion does not constitute justification and/or reason to believe that income chargeable to tax has escaped assessment. AO in the reasons recorded does not even make an allegation that there was failure on the part of assessee to truly and fully disclose material facts. From the reasons as reproduced earlier, we are unable to cull down the factum of failure to disclose. The reason, in our view, does not indicate anything cogent or clear that in fact there was failure on the part of Assessee to truly and fully disclose all material facts necessary for its assessment. There is no live link, which is a sine qua non between the material before the AO in the present case and the belief which he has to form regarding escapement of income. We are satisfied that the jurisdictional conditions have not been met and the reassessment proceedings are nothing but a change of opinion . This change of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of assessment, Petitioner was issued notice dated 2nd July 2015 calling upon Petitioner to give details of the business activity and file documents. Petitioner complied with the requirements vide letter dated 16th July 2015. Respondent No. 1 issued a notice dated 3rd September 2015 calling upon Petitioner to provide: (a) Details of profit and loss account in derivative segment along with global report; and (b) Details of profit and loss account in cash segment along with global report. Further other details were also called for, which Petitioner supplied vide its letter dated 20th October 2015. Further submissions were filed by Petitioner on 18th November 2018 giving the break-up, profits from derivative segment and cash segment. As per the statement showing details of profit segment-wise, Petitioner has shown profit of Rs. 74.41 Lakhs from both the segments. 6. Petitioner filed further submissions dated 11th December 2015 in which it provided details with respect to transactions reported in the Individual Transaction Statement ( ITS ). All these are reflected in Petitioner s record. 7. Thereafter, Petitioner received the impugned notice dated 31st March 2021 under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... close material facts. 9. Mr. Pardiwalla for Petitioner submitted that: (a) There is not even an allegation that there was failure to truly and fully disclose material facts. (b) Even though in Crompton Greaves Ltd v. Assistant Commissioner of Income-Tax, Circle 6(2) Ors. 2014 SCC OnLine Bom. 2285, the Court has held that if the factum of failure to disclose can be culled down from the reasons in support of the notice seeking to reopen assessment, that will certainly not be fatal to the assumption of jurisdiction under Sections 147 and 148 of the Act, the reasons does not indicate anything cogent or clear that in fact there was failure on the part of Assessee to disclose truly and fully all material facts necessary for its assessment. (c) In any event, the issue regarding information from security transaction tax return was a subject of consideration in the assessment proceedings and, therefore, this reopening is purely based on change of opinion. 10. Mr. Suresh Kumar reiterated what is stated in the affidavit in reply and in the order of objections and submitted that even if these transactions may have been reflected in the ITS, the information was these transactions were not genui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Therefore, the sine qua non to issue a notice for reopening of assessments even within a period of less than four years from the end of the assessment year, is reason to believe that income has escaped assessment and this reason to believe should be on the basis of tangible material, otherwise the exercise of power to reopen would be a review of the assessment order. As held by this court in the matter of Siemens Information Systems Ltd. v. Asst. CIT (2012) 343 ITR 188 (Bom) such tangible material could be even on the basis of fresh material obtained during subsequent assessment proceedings. However, the test is that the reason to believe that income has escaped assessment should emanate from tangible material. The Hon ble Apex Court in C ommissioner of Income Tax v. Kelvinator 2010 (320) ITR 561 (SC)., held as under: 6. 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 fulfilment of certain precondition and if the concept of change of opinion is removed, as contended on behalf of the Department, then, in the garb of reo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from assessment in the particular year because of his failure to disclose fully and truly all material facts. It is not doubt true that the court cannot go into the sufficiency or adequacy of the material and substitute its own opinion for that of the Income-tax Officer on the point as to whether action should be initiated for reopening assessment. At the same time we have to bear in mind that it is not any and every material, howsoever vague and indefinite or distant, remote and far-fetched, which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment .... 18. Thus, for the reasons discussed above and upon perusal of the reasons to believe escapement of income from assessment as well as the order rejecting Petitioner s objections impugned herein, we have no hesitation in holding that there is no live link, which is a sine qua non between the material before the AO in the present case and the belief which he has to form regarding escapement of income. 19. In these circumstances, we are satisfied that the jurisdictional conditions have not been met and the reassessment proceedings are nothing but a change of opinion . This cha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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