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TMI Blog2012 (12) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... arned CIT(A)XXXI, Mumbai dated 27.3.2008. 2. The assessee in the present case is connected with operation of aircrafts. The return of income for the year under consideration was originally filed by it on 18.10.2001 declaring total income at Nil after claiming exemption for the entire income under Article 8 of Indo-US DTAA. The said return was initially processed by the Assessing Officer u/s. 143(1) of the Act on 2.1.2003. Subsequently, he noticed from the perusal of the record that interest income of Rs. 17,09,023/- was earned by the assessee on fixed deposit and since the same was not connected with the operation on aircrafts, assessee was not entitled for exemption under Article 8 of IndoUS DTAA in respect of the said interest income. According to the Assessing Officer, the said interest was chargeable to tax in the hands of the assessee under Article 11 of Indo-US DTAA @ 15%. He therefore reopened the assessment for the year under consideration after recording the reasons and issued a notice u/s. 148 on 26.10.2005. In response to the said notice, a letter dated 14.11.2005 was filed by the assessee requesting that the return originally filed by it on 18.10.2001 be treated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied on the decision of Hon'ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers (P) Ltd. (291 ITR 500), wherein it was held that so long as the ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate proceeding under section 147 even when intimation under section 143(1) had been issued. He also relied on the decision of Hon'ble Gujarat High Court in the case of Praful Chunilal Patel (236 ITR 832), wherein it was held that it is not necessary that fresh facts should come to the notice of the Assessing Officer subsequent to original assessment to justify reopening and if the Assessing Officer on the basis of material already available at the time of original assessment comes to a conclusion that original assessment was erroneous, then such facts alone would justify initiation of reassessment proceedings. Accordingly validity of reassessment made by the Assessing Officer was upheld by learned CIT(A) and even the addition made therein to the total income of the assessee on account of interest income was confirmed by him on merit. Aggrieved by the order of learned CIT(A), assessee has preferred this appeal before the Tribunal. 4. In ground No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision of Hon'ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers (P) Ltd. (supra) 7. In the rejoinder, learned counsel for the assessee submitted that there is no reference whatsoever to any assessment of earlier years made by the Assessing Officer in the reasons recorded to justify the reopening. He also submitted that the view expressed by Hon'ble Gujarat High Court in the case of Praful Chunilal Patel (supra) has not been agreed to by the Full Bench of the Hon'ble Delhi High Court in the case of Kelvinator of India Ltd. (supra), which has been affirmed by Hon'ble Supreme Court. He further submitted that the decisions of Hon'ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers (P) Ltd. (supra) and in the case of Kelvinator of India Ltd. (supra) have been taken into consideration by the Third Member in the case of Telco Dadaji Dhackjee Ltd. (supra) while deciding a similar issue in favour of the assessee. 8. We have considered the rival submissions and perused the material on record. It is observed that in the return of income originally filed for the year under consideration on 18.10.2001, exemption was claimed by the assessee in respect of intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon by learned CIT(A) in his impugned order. As pointed out by learned counsel, the view expressed by Hon'ble Gujarat High Court in the said case that there is no necessity for the Assessing Officer to have fresh facts coming to his notice subsequent to original assessment to justify reopening has not been subscribed to by the Full Bench of Hon'ble Delhi High Court in the case of Kelvinator of India Ltd. (supra) which has been affirmed by Hon'ble Supreme Court. As held by Hon'ble Delhi High Court, if the contention of the revenue based on the decision of Hon'ble Gujarat High Court in the case of Praful Chunilal Patel (supra) is accepted, the same would confer an arbitrary power upon the Assessing Officer to reopen the proceedings only on the slightest pretext, which is not permissible. 10. Learned Departmental Representative has also relied on the decision of Hon'ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers (P) Ltd. (supra) to contend that the reopening of assessment completed originally u/s. 143(1) is permissible without there being any new material coming to the possession of the Assessing Officer if the reasons recorded for reopening of assessment are otherwi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound of a mere change of opinion, it is open to an assessee to challenge the notice on the ground that there is no reason to believe that income chargeable to tax has escaped assessment. As regards the decision of Hon ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers (P) Ltd. (supra) cited by the Revenue and relied upon by the Accountant Member, the Third Member held that the same was applicable in cases where the return was processed u/s 143(1) but later on notice was issued u/s 148 and the assessee challenges the notice on the ground that it is prompted by a mere change of opinion. The Third Member then referred to the decision of Hon ble Supreme Court in the case of CIT vs. Kelvinator of India (supra) wherein it was held that there should be tangible material to come to the conclusion that income had escaped assessment. Relying on the said decision, it was held by the Third Member that while resorting to section 147 even in a case where only an intimation had been issued u/s 143(1)(a), it is essential that the Assessing Officer should have before him tangible material justifying his reason to believe that income had escaped assessment. Since there was no such tan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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