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TMI Blog2014 (9) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... ipline on the part of the Income Tax Officer. Also in Steamship Co. Ltd. v. Joint CIT [2005 (2) TMI 46 - CALCUTTA High Court] it has been held that if the AO had not questioned the entitlement of the assessee to deduction u/s 80-IB in the assessment years, it was their mistake - All information regarding the alleged manufacturing process of the assessee was before them - After the time limit for making assessment or reassessment had long expired, the Revenue cannot turn round, take recourse to an extraordinary provision which is section 147 and attempt to reopen concluded assessments - If such exercise is permitted that would be quite contrary to the intention of the Act – the subsidy was treated as a capital receipt in Section 263 proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tition, also, mentioned in the note that the said receipt was nontaxable as held by the Income Tax Tribunal Kolkata in its order dated 18th May, 2001 in ITA No. 1080/Cal/98 in the similar case of Re: Rasoi Ltd. Vs. Deputy Commissioner of Income Tax, Special Range-123, Calcutta. The return was filed under Section 139 of the Act. It was not put under scrutiny or formally assessed. To put it more legalistically, no notice under Section 143 (2) of the Act was issued to the writ petitioner. On 22nd March, 2013 the income tax department issued a notice to the writ petitioner under Section 148 of the Act proposing to reopen the assessment for the assessment year 2006-2007. This notice under Section 148 is issued when the department contempla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mere change of opinion , which cannot be per se reason to reopen . An assessment may be reopened when in spite of exercise of due diligence something escaped the attention of the assessing officer. The grounds on which an assessment can be reopened are very limited and strictly construed. By his letter dated 10th April, 2013 the writ petitioner requested the assessing officer to treat the original return filed by him for the said assessment year as the return under Section 148. The writ petitioner also sought reasons. By a letter dated 16th May, 2013 issued by the department under Section 143 (2) of the Act, he was asked to appear before the assessing officer on 28th May, 2013. By another letter of the same date the reasons for issuan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under sections 147/148 of the said Act, beginning from issuance of the notice till passing of the order rejecting the objection of the writ petitioner are challenged in this writ application. So much has been said on the judgment of the Hon ble Supreme Court in Sahney Steel and Press Works Ltd and Others V. Commissioner of Income-Tax reported in 228 ITR 253. The judgment of the Court was delivered by Justice Suhas C. Sen. It was based on a House of Lords opinion in Seaham Harbour Dock Co. s case reported in (1931) 16 TC 333 (HL). The principle enunciated in that case was that assistance given by the government for completion of a project was of a capital nature. Another opinion of the House in Ostime s case (1946) 14 ITR (Suppl) 45 (HL) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, when there was a specific observation of a Division Bench of this Court that this particular subsidy was to be taken as a capital receipt and not a revenue receipt it was gross indiscipline on the part of the Income Tax Officer to refer to the Hon ble Supreme Court decision in Sahney Steel which did not decide whether this subsidy was to be taken as capital receipt or revenue receipt but laid down a broad proposition as to how on factual enquiry subsidies were to be treated. Following Radhasoami Satsang V. CIT (1992) 193 ITR 321 (SC) the Hon ble Supreme Court in Commissioner of Income-Tax V. 1. Excel Industries Ltd. 2. Mafatlal Industries P. Ltd. reported in (2013) 358 ITR 295 (SC) disallowed reconsideration of an issue in a sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e stated earlier, being escapement of income / Linked to this is the principle that a change of opinion would not constitute such escapement. In India Steamship Co. Ltd. vs. Joint CIT reported in (2005) 275 ITR 155 (Cal) cited by the learned counsel for the writ petitioner, our court was concerned with deduction of expenditure for repairing ships. Such deduction was sought to be reopened and disallowed in section 147 proceedings after having been allowed in the previous assessment years. The court allowed the writ application after discussing in detail several authorities on the subject. The court held that when all the necessary information was before the Assessing Officer in the earlier assessments, reopening under section 147 amounted t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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