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TMI Blog2024 (6) TMI 1370X X X X Extracts X X X X X X X X Extracts X X X X ..... out from the order dated 20.10.2023 passed by the Income Tax Appellate Tribunal (for short "the Tribunal"), Ahmedabad in ITA No. 1229/Ahd/2017 for the Assessment Year 2008-09. "A. Whether on the facts and circumstances of the case and in law, the Ld. Appellate Tribunal was justified in holding that reopening of assessment under section 147 is only change of opinion and hence bad in law, without appreciating that the issue-in-hand was neither examined by the assessing officer during original assessment proceedings nor the assessing officer had formed any opinion on the issue?" B. "Whether on facts and circumstances of the case and in law the Ld. Appellate Tribunal was justified in holding reopening u/s 147 of the Act as invalid without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine, additional depreciation could not be allowed. Thus, the additional depreciation on machinery spares of Plant & Machinery which was already acquired and installed earlier cannot be allowed. (c) In view of the above facts, I have reason to believe that in this case income chargeable to tax in respect of Rs. 7,74,069/- has escaped assessment for the AY 2008-09 within the meaning of clause (c) of Explanation 2 of section 147 of the Act" 3. The Assessing Officer in the reassessment order made an addition disallowing Rs. 7,74,069/- towards the depreciation and reduced returned loss. 4. The CIT (Appeals) allowed the Appeal filed by the Assessee holding that the reasons recorded for reopening the assessment by the Assessing Officer are b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he basis of the judicial pronouncement relied upon by the appellant in its submission as reproduced above. Hence, the reopening of the assessment is held to be bad in law. Since the reopening of the assessment has itself been held bad in law, hence the merit of the addition made in the reassessment order is not required to be adjudicated. Hence this ground of appeal is not adjudicated. Hence, this ground of appeal is not adjudicated. 5. The Tribunal on an appeal filed by the Appellant-Revenue following the decision of the Kelvinator in the case of CIT Vs. Kelvinator of India Ltd. of the Hon'ble Supreme Court upheld the order passed by the CIT (Appeals) and observed as under:- "7.2. From the reasons recorded by the A.O., it clearly refle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to re-open the assessment. Therefore, post 01.04.1989, power to reopen 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 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 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 reope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground that the assessment order is erroneous and prejudicial to the interest of Revenue. Further wherever a regular assessment order is passed by Assessing Officer, it is presumed that the order was passed after application of mind, thereby Assessing Officers are not given powers to reopen the assessment on the same set of facts in the absence of tangible material. 8. The Jurisdictional High Court of Gujarat in the case of Sandesh Ltd. (cited supra) distinguished the judgment of PVS Beedies Pvt. Ltd. that reopening cannot be resorted to under the insistence of the audit party, particularly when the Assessing Officer holds a contrary belief. The relevant portion of the judgment reads as under: ".....5. The record suggests that pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udit party, reopening may be permissible if it can be gathered that having applied his mind to such an issue, the A.O. formed an independent belief that income chargeable to tax has escaped assessment. However, as held by this Court in case of Adani Exports v. Dy CIT [1999] 240 ITR 224 and several times repeated by the Supreme Court later, reopening cannot be resorted to under the insistence of the audit party, particularly when the Assessing Officer holds a contrary belief. From this angle, we have perused the original files and do not find that the Assessing Officer independently believed that the audit note or the audit objection was otherwise valid. 7. Such being the position, on these two grounds, impugned notice is set aside. Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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