9911796707
TMI Blog2024 (11) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... was assessed u/s 143(3) of the Act vide order dated 18.02.2015 accepting the returned income. ii) Subsequently information was received by assessing officer from the office of DDIT(Inv.) unit 4(1), Kolkata that the assessee had received Rs. 35,00,000/- from one M/s. Tribhuvan Dealtrade Pvt. Ltd. and it was found that the transactions done had no economic rationale. M/s. TDPL was found to be a paper concern involved in providing accommodation entries and the assessee was identified as one of the beneficiaries of accommodation entries provided by M/s. TDPL. iii) On the basis of aforesaid information and after recording the reasons, the case was reopened u/s. 147 of the Act after obtaining necessary approval from the principal CIT-11, Mumbai vide letter dated 19.03.2019 and the notice u/s. 148 was issued on 22.03.2019 and served upon the assessee. iv) In response to the said notice, assessee filed return for A.Y. 2012-13 on 25.04.2019. Reasons to reopening were provided to assessee vide letter dated 25.04.2019 and the assessee's objections to reopening were rejected vide order dated 14.06.2019. v) Further, statutory notices u/s. 143(2) r.w.s 142(1) were issued and served upon the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned DR has vehemently supported the impugned order passed by learned CIT(A) . 7. It is worth noting that Hon'ble Supreme Court in Civil Appeal No. 8629 of 2024, union of India and others V. Rajeev Bansal vide judgement dated 03.10.2024 observed that the revenue has to follow the following procedure for reopening assessment under old regime. (i) section 147 allows the assessing officer to reassess any income chargeable to tax if the officer had 'reasons to believe' that such income escaped assessment. (ii) The assessing officer has to ensure that the notice u/s. 148 was issued within the time limit prescribed u/s. 149 of the Act. (iii) The assessing officer has to obtain the sanction of the specified authority u/s. 151 of the Act before issuing a reassessment notice. (iv) The assessing officer is also required to afford an opportunity of hearing in terms of decision of Hon'ble Supreme Court in GKN Driveshafts (India) Ltd. V. Income Tax Office (2003) 1SCC72. (v) The assessing officer is therefore empowered to issue the notice of reassessment u/s. 148 of the Act. 8. Sections 147 to 151 of the Act deal with the procedure of reassessment. This scheme has been substantially overha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment, the review would take place. The concept of change of opinion has been built in the statute to check abuse of power by the Assessing Officer. The Assessing Officer has the power to reopen only when there is tangible material to come to the conclusion that there is escapement of income from the original assessment. The test of "tangible material" has been enunciated in a judgment of the Supreme Court in CIT v. Kelvinator [2010] 187Taxman312(SC) of India Ltd. held thus (page 564): "...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 reopen assessments on the basis of 'mere change of opinion', which can-not 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 the fulfillment of certain pre-conditions. If the concept of 'change of opinion' is removed, as contended on behalf of the Department, then the review would take place in the garb of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the loans/advances. The list includes all the names given in paragraph no.3 of the reasons for re-opening. These have been considered in the assessment order because in the assessment order there is reference to five notices issued under Section 142(1) of the Act and it is also noted that the assessee has filed details through ITBA Module in response to the notices issued from time to time which are placed on record. 5. Mr. Suresh Kumar submits that these cannot be said to have been subject of consideration of the Assessing Officer because the assessment order does not contain reference and/or discussion. We will have to reject the submissions of Mr. Suresh Kumar since this court has time and again held that once a query is raised during the assessment proceedings and the assessee has replied to it, it follows that the query raised was a subject of consideration of the Assessing Officer_while completing the assessment. It is not even necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. [Aroni Commercials Ltd. vs. Deputy Commissioner of Income-tax 2(1)], [2014] 44Taxmann.com304(Bom) It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee-company should have received an interest income worth approximately income worth approximately Rs. 3 lakhs if interest had been charged on this advance. Hence, this interest income of approximately Rs. 3 lakhs has escaped assessment. Once again the reason which is recorded is beyond the scope of section 147. It is an accepted position that the assessee-company has in fact nor received any interest in respect of this advance from M/s. C. R. Developers (P) Ltd. in the assessment year 1988-89. When no income is received there is no question of paying any tax on income which the respondents think, should have been received but was in fact not received. In the case of CIT v. A. Raman and Co. [1968] 67 ITR 11, the Supreme Court said that the law does not oblige a trader to make the maximum profit that he can out of his trading transactions. Income which accrues to a trader is taxable in his hands. Income which he could have but has not earned, is not made taxable as income accrued to him. The Court also said that the High Court exercising Jurisdiction under article 226 of the Constitution has power to set aside a notice issued under section 147(b) if the condition prece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if it is an error that the Assessing Officer discovered, still an error discovered on a re-consideration of the same material does not given him power to re-open. When the primary facts necessary for assessment are fully and truly disclosed, the Assessing Officer is not entitled on change of opinion to commence proceedings for reassessment. Even if the Assessing Officer, who passed the assessment order, may have raised too many legal inferences from the facts disclosed, on that account the Assessing Officer, who has decided to reopen assessment, is not competent to reopen assessment proceedings. Where on consideration of material on record, one view is conclusively taken by the Assessing Officer, it would not be open to reopen the assessment based on the very same material with a view to take another view." 10. The learned AR has drawn the attention of the bench towards the reasons of opening recorded by learned assessing officer and which is at page 18 of the assessee's paper book. The relevant para 3.0 of Reasons of reopening, reads as under: "3.0 Hence, it is evident from the above that the assessee failed to disclose fully and completely the material facts in the return of i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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