2013 (12) TMI 661

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..... essment does not stand obliterated after the substitution of section 147 - The Assessing Officer has to have reason to believe that income has escaped assessment - The Assessing Officer cannot reopen an assessment on mere change of opinion - The Assessing Officer has power to reopen an assessment if he had "tangible materials" to prove income has escaped assessment – Decided in favour of assessee.
Sri P. K. Bansal, AM And Sri George Mathan, JM,JJ. For the Appellant: Shri K. K. Sarkar For the Respondent: Shri A. H. Chowdhury, Sr. DR ORDER Per Bench This is an appeal filed by the assessee against the order of the ld. C.I.T. (A)-VI, Kolkata dated 02.04.2012. 2. Even though the assessee has taken four effective grounds of appeal ground .....

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..... n rate vis-à-vis the appreciation in assessee's foreign exchange balance in the FCNR A/c appears to be disproportionate in the sense that the gain was too high compared to the balance. The cumulative effect of the above facts leads to the conclusion that major part of the credit in assessee's capital account under the garb of 'Foreign Exchange Fluctuation Gain' was nothing but assessee's income from undisclosed sources which has escaped assessment. Besides, it is also observed that rental income of last year received during the year was not offered to tax during the last year on accrual basis and should have been charged to tax in this year. In view of the above, I have reasons to believe that income has escaped assessment. Issue n .....

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..... sing Officer has to have reason to believe that income has escaped assessment, but this does not imply that the Assessing Officer can reopen an assessment on mere change of opinion. The concept of "change of opinion" must be treated as an in-built test to check the abuse of power. Hence after April 1, 1989, the Assessing Officer has power to reopen an assessment , provided there is "tangible materials" to come to the conclusion that there was escapement of income from assessment. Reason must have a link with the formation of the belief." 5.1. We accordingly set aside the order of the ld. CIT(A) and quash the re- assessment framed by the AO. Thus we allow ground nos 2 to 4 of the assessee. Since we have already quashed the re-assessment, in .....

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