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TMI Blog2013 (3) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... ing his mind made part disallowance out of transportation expenses, the AO cannot say that he has not formed an opinion. - Following the decisions Supreme Court and Hon’ble Delhi High Court (FB) in the case of Kelvinator of India Ltd. ([2002 (4) TMI 37 - DELHI HIGH COURT] and [2010 (1) TMI 11 - SUPREME COURT OF INDIA]) decided in favor of assessee. - I.T.A No. 1066/Kol/2010 - - - Dated:- 20-1-2012 - Sri Mahavir Singh Shri C. D. Rao, JJ. For the Appellant: Shri H. Dasgupta For the Respondent: Shri T. K. Dutta ORDER Per Mahavir Singh, JM. This appeal by assessee is arising out of order of CIT(A), Asansol in Appeal No.195/CIT(A)/Asl/Circle-2/Asl/2009-10 dated 08.03.2010. Assessment was framed by ACIT, Circle-2, Asansol u/s. 143(3)/147 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) for Assessment Year 2005-06 vide his order dated 31.12.2009. 2. The first issue in this appeal of assessee is against the order of CIT(A) confirming the action of Assessing Officer in assumption of jurisdiction of reopening u/s. 147 r.w.s. 148 of the Act. For this, the assessee has raised following ground no.5: 5 For that on the facts of the case the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d out of which the assessee has shown at Rs.27,24,486/- as sundry creditors. The assessee was asked to file details mailing address of the persons to whom transport charges has been paid. In reply to said queries the assessee has stated that the mailing address of each payee is not available to the assessee as no address of proprietors of each truck was taken from each truck driver as the payments were made by cash to drivers. Thousands of trucks were engaged for this jobs and for that bills are prepared by the assessee firm in accordance with the trips and measurement of the job done in each fortnight. It is not possible for the assessee to maintain party wise or truck wise register for truck hire charges or the dues against them. After verifying books of a/c, a show cause letter was issued to the assessee on 07.05.07 stating why a sum of Rs. 1,00,000/- on estimate should not be disallowed for want of proper verification. In reply to said show cause notice the assessee has stated that all the payments made to truck drivers are duly receipted on bills mentioned with trips and quantum and produced some self made debit vouchers which are verified and found that all the preparation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and considering the nature of vouchers, trips and quantum of payment, the Assessing Officer estimated the disallowance at Rs.50,000/-. Ld. Counsel for the assessee stated that the Assessing Officer on this very issue has formed an opinion and subsequently, he resorted to change in opinion and recorded the reasons that these transportation charges are not allowable, as no TDS was deducted on these expenses. The Assessing Officer recorded the reasons that these expenses are not allowable in view of the provisions of section 40(a)(ia) of the Act and he also noted that during assessment u/s. 143(3) of the Act only Rs.50,000/- has been disallowed and the balance Rs.2,88,08,554/- is to be disallowed now. This fact is very clear from the above reasons recorded reproduced above. We find that the Assessing Officer while framing reassessment has noted another fact as argued by assessee s counsel before him that assessee is not liable to TDS as it had not incurred expenses on hiring of trucks on contract or sub contract basis either verbal or written with any of the payees. Ld. Counsel before Assessing Officer narrated that thousands of dumpers and trucks are taken mostly through brokers, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provide jurisdiction to the Assessing Officer to initiate proceedings under section 147 of the Act. 6. Further, similar view was taken by Hon ble Delhi High Court(FB) in the case of CIT Vs. Kelvinator India Ltd. (2002) 256 ITR 1 and interpreted the provisions of section 147 of the Act, as substituted w.e.f. 01.04.1989, by holding that it does not postulate conferment of power upon the Assessing Officer to initiate reassessment proceeding upon his mere change of opinion. Further, if reason to believe of the Assessing Officer is founded on an information which might have been received by the Assessing Officer after the completion of assessment, it may be a sound foundation for exercising the power under section 147 read with section 148. It cannot be accepted that only because in the assessment order, detailed reasons have not been recorded, an analysis of the materials on the record by itself may be justifying the Assessing Officer to initiate a proceeding under section 147. When a regular order of assessment is passed in terms of section 143(3), a presumption can be raised that such an order has been passed on application of mind. It is well know that a presumption can also be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pport from the changes made to section 147 of the Act, as quoted hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words reason to believe but also inserted the word opinion in section 147 of the Act. However, on receipt of representations from the companies against omission of the words reason to believe , Parliament reintroduced the said expression and deleted the word opinion on the ground that it would vest arbitrary powers in the Assessing Officer. We quote hereinbelow the relevant portion of Circular No. 549 dated October 31, 1989 ([19901 182 ITR (St.) 1, 29), which reads as follows: 7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression reason to believe in section 147. A number of representations were received against the omission of the words reason to believe from section 147 and their substitution by the opinion of the Assessing Officer. It was pointed out that the meaning of the expression1 reason to believe had been explained in a number of court rulings in the past and was well settled and its omission from section 147 would give arbitrary powers to the Assessing Officer to reopen past ..... X X X X Extracts X X X X X X X X Extracts X X X X
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