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TMI Blog2011 (3) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... me were initiated merely on a change of opinion without any fresh material coming into the possession of the AO - Decided in the favour of assessee - ITA No. 1604/Mum/2010 - - - Dated:- 16-3-2011 - N.V. Vasudevan, Rajendra Singh, JJ. M.M. Golval/Zameer Mehta for the Appellant Shravan Kumar for the Respondent ORDER N.V. Vasudevan: This is an appeal by the assessee against the order dated 18/1/2010 of CIT(A)-21, Mumbai relating to assessment year 2001-02. In Ground No.1 to 7 the assessee has challenged the validity of initiation of reassessment proceedings under section 147 of the Income Tax Act, 1961 (the Act). One of the ground of challenge to the validity of notice under section 147 is that the notice u/s.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in carrying out business operations in the light of the decision in the case of Sahney Steel and Press Works Ltd.(228 ITR 253). You are requested to submit your explanation in this regard within 7 days from the receipt of this letter." 4. In reply to the said notice, the assessee by its letter dated 16/1/2004 submitted that the subsidy received by the assessee under the Government of Punjab Package Incentive 1992 Scheme was to attract entrepreneurs to set up industrial units in the State of Punjab for creating employment opportunities and to offset locational disadvantage of the State. Since the aforesaid sum was sanctioned for capital investment for starting a new unit it has been treated as a capital receipt by the assessee. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO completed the reassessment bringing to tax the aforesaid sum received by the assessee from PSIEC treating the same as revenue receipt. 7. Before CIT(A) the assessee challenged the validity of initiation of proceedings under section 147 of the Act on the ground that the same has been done purely on a change of opinion. On this submission the CIT(A) held as follows: "The appellant also argued that the AO issued notice u/s. 148 based on change of opinion. It is true that during the assessment proceedings the AO asked a specific query on this issue by citing the decision of Supreme Court in the case of Sahney Steel and Press Works Ltd. but ultimately did not make any addition. However, it appears that the AO misinterpreted/misunders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Delhi High Court has taken a view that reassessment proceedings cannot be initiated merely on the basis of change of an opinion. This decision of the Hon'ble Delhi High Court has since been confirmed by the Hon'ble Supreme Court in CIT vs. Kelvinator of India Ltd., 320 ITR 561(SC). With regard to the observation of the CIT(A) that while completing the original assessment the AO misinterpret and misunderstood the decision of the Hon'ble Supreme Court in the case Saheny Steel (supra), the ld. Counsel for the assessee submitted that in such circumstances the AO cannot resort to reassessment proceedings under section 147 of the Act without any concrete or tangible material. With regard to the stand of the revenue that the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t proceedings clearly shows that on the very same material which was available while completing the assessment under section 143(3) of the Act he had on a mere change of opinion issued notice for reassessment. It is not permissible for the AO to resort to proceedings under section 147 merely on change of opinion. The Hon'ble Supreme Court in the case of CIT vs. Kelvinator of India Ltd. (supra) has held as follows: "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 inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Indian Evidence Act judicial and official acts have been regularly performed. If it be held than order which has been passed purportedly without application of mind would itself confer jurisdiction upon the Assessing Officer to reopen the proceeding without anything further, the same would amount to giving a premium to an authority exercising quasi-judicial function to take benefit of its own wrong." 12. The Hon'ble Delhi High Court in the case of CIT vs. Eicher Ltd., 294 ITR 310(Del) has held as follows: "If the entire material had been placed by the assessee before the Assessing Officer at the time when the original assessment was made and the Assessing Officer applied his mind to that material and accepted the view canvas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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