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TMI Blog2013 (11) TMI 1323X X X X Extracts X X X X X X X X Extracts X X X X ..... f order of CIT(A), Central-1, Kolkata in Appeal No. 99/CC-XXVIII/CIT(A),C-1/08-09 dated 09.03.2011. Reassessment was framed by DCIT, XXVIII, Kolkata 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 24.12.2009. Original assessment was framed by ACIT, CC-XXVIII, Kolkata u/s. 143(3) of the Act vide order dated 23.03.2007. 2. The only issue in this appeal of revenue is against the order of CIT(A) quashing the reopening u/s. 148 of the Act by AO of proceedings being merely based on change of opinion within four years. For this, revenue has raised following ground nos. 1 and 2: 1. Whether Ld. CIT(A), C-1, Kolkata had erred to quash the notice under section 148 of the I. T. Act on the ground that reopening of the proceedings being merely based on change of opinion although the reopening proceeding was taken by the Assessing Officer within 4 years from the end of the assessment year? 2. Whether Ld. CIT(A), C-1, Kolkata had erred in annulling the reassessment order under section 143(3)/147 although reassessment proceeding as taken by the Assessing Officer was as per the Income Tax Act? 3. Br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equisitioned detail were examined by the A.O with reference to the details of account filed along with the return. Hence it is evident that the disclosure of the interest paid to M/s. Binani Cement Ltd was very much on record and the same was duly considered by the A.O while passing the assessment order under section 143(3) of the Act. There is no new material in the possession of the A.O as evident from the reason recorded, which could lead to the conclusion that the income has escaped assessment. Now it is a settle law that AO deemed to have applied his mind if facts are on record and reopening u/s 147 on change of opinion is not permissible even within 4 years. The Hon ble Supreme Court C.I.T. vs. Kelvinator (I) Ltd. - 320 ITR 651 - has confirmed the finding of the full Bench decision of the Hon ble Delhi High Court that on the basis of same facts and materials (and no more) disclosed at the time of original assessment made under section 143(3) of the I.T. Act, by mere change of opinion, the assessment cannot be re-opened u/s.147 of the I.T. Act, 1961. 3.2. In CIT vs. Kelvinator of India Ltd. 256 ITR 1 = (2003-TII-19-HC-DEL-INTL-LB) the Full Bench of the Delhi High Court wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reopening of the proceeding, being merely based on change of opinion should be considered as invalid and illegal and should be cancelled. Accordingly the notice issued under section 148 of the Income Tax Act is quashed and accordingly the order passed under section 147/143(3) is annulled. Aggrieved, revenue is in appeal before us. 5. Before us, Ld. CIT(DR) Shri A. K. Mahapatra heavily relied on the decision of Hon ble Delhi High Court Full Bench in the case of CIT Vs. Usha International Ltd. (2012) 348 ITR 485 (Del), wherein it has been held as under: Distinction between disclosure/declaration of material facts made by the assessee and the effect thereof and the principle of change of opinion is apparent and recognized. Failure to make full and true disclosure of material facts is a precondition which should be satisfied if the reopening is after four years of the end of the assessment year. The Explanation stipulates that mere production of books of account and other documents, from which the Assessing Officer could have with due diligence inferred facts does not amount to full and true disclosure. Thus, in cases of reopening after four years as per the proviso, cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Hon ble Supreme Court in the case of Kelvinator of India Ltd. (supra). He also relied on various case laws of different High Courts including the decision of Hon ble Calcutta High Court in the case of India Steamship Co. Ltd. Vs. JCIT (2005) 275 ITR 155 (Cal). He also relied on the decision of Hon ble Delhi High Court in ITA No.555 of 2012 dated 12.12.2012 in the case of CIT Vs. Orient Craft Ltd. 7. We have heard rival submissions and gone through facts and circumstances of the case. The above stated facts are undisputed. Even from the reasons recorded the AO has noted and also reached the belief that income has escaped assessment on perusal of the assessment records that the following discrepancies are found , as the assessment was framed by the AO originally u/s. 143(3) of the Act, thereby scrutinizing the entire issue vide issuing questionnaire on the details of interest paid to BCL at Rs.8,59,78,653/-. We find that the Hon ble Supreme Court in the case of Kelvinator of India Ltd. (supra) has observed as under: 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er provisions of the new section 147, however, remain the same." Further, in this judgment Hon ble Supreme Court has also observed that after 01.04.1989, the AO has power to reopen the assessment provided there is tangible material to come to the conclusion that there is escapement of income. 8. In the present case before us, the entire details of interest paid to Binani Cement Ltd. was available with the AO at the time of original assessment and the present AO, reopening the assessment, has recorded the reasons from the perusal of assessment records and also found discrepancy and not escapement of income, which is the mandate of section 147 of the Act. Even Hon ble Delhi High Court in the case of Orient Craft Ltd. (supra) has finally held as under: 14. In the present case the reasons disclose that the Assessing Officer reached the belief that there was escapement of income on going through the return of income filed by the assessee after he accepted the return under section 143(1) without scrutiny, and nothing more. This is nothing but a review of the earlier proceedings and an abuse of power by the Assessing Officer, both strongly deprecated by the Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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