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TMI Blog2015 (4) TMI 866X X X X Extracts X X X X X X X X Extracts X X X X ..... hange of opinion based on the same set of facts available on record at the time of framing the original assessment. It is settled proposition of law that even after the amendment in the provisions of Section 147/148 of the Act w.e.f. 01.04.1989 mere change of opinion cannot give rise to the valid reassessment proceedings. We are fortified by the view of Hon’be Supreme Court in the case of CIT Vs. Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT OF INDIA]. Respectfully following the ratio laid down in the above cited case, we are of the opinion that even in the present case, in the absence of any fresh material as well as the proper reasons recorded, we have no hesitation to quash the reassessment proceedings. - Decided against the revenue. - ITA No. 2726/Del /2011, C.O. NO. 206/Del/2011 - - - Dated:- 10-4-2015 - Sh. G.C. Gupta And Sh. Inturi Rama Rao JJ For the Appellant : S/sh. KVSR Krishna, CA Satish Sachdeva, CA For the Respondent : Sh. Vikram Sahay, Sr. DR ORDER Per Inturi Rama Rao, A.M.: C.O. NO. 206/Del/2011 in ITA No. 2726/De/2011 The cross objections are filed by the assessee company challenging the reopening of the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of its stock in trade (camouflaged by the assessee as investments) and consequently any proceeds out of sale / purchase of these shares was business income of the assessee. It is further contended that the assessing officer has wrongly stated that income of ₹ 3,06,37,449/ - has escaped assessment by virtue of either omission or failure on the part of the assessee to disclose truly all material facts necessary for assessment. 3. That the learned CIT(A)-XVIII has erred in holding that it is not a case of change of opinion where no new facts or material has been brought on records in the reassessment proceedings. It is contended that the audit objection without mentioning any fact(s) cannot be basis of reopening of assessment under section 147/ 148 of the Income Tax Act, 1961. It is further contended that all the details and documents relating to the issue involved has already been submitted during the course of original assessment proceedings as per the specific query(s) raised by the Assessing Officer. 4. The above grounds of cross objections are without prejudice to one and another. 5. The respondent craves to be allowed, to add, to alter/amend or delete any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee as investments) and consequently any proceeds out of sale/purchase of these shares was business income of the assessee. Hon ble Supreme Court had held in the case of G. Venkata Swami Naidu Co. Vs. CIT(1959) 35 ITR 594 (SC) that in cases where the purchase has been made solely and exclusively with the intention of resale at a profit and the purchaser has no intention of holding the property for himself or otherwise enjoying it or using it the presence of such intention would raise a strong presumption that the transaction is in the nature of trade. In the instant case, the assessee is basically an investor and the purchase and sale of shares are very much allied to its usual business. The shares have been purchased in very large quantities, which eliminate the possibility of investment for personal use possession or enjoyment. Further, the share purchase/sale transactions are repetitive in nature in the case of assessee. In view of the above facts, I have reasons to believe that income of ₹ 3,06,37,449/- has escaped assessment by virtue of either omission or failure on the part of the assessee to disclose fully or truly all material facts necessary for assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee. The assessment gets reopened not only qua those grounds which are recorded in the reasons, but also with respect to entire original assessment, of course at the hands of the Revenue. This obviously would lead to considerable hardship and uncertainty. It is precisely for this reason that even while recognizing such powers, in special requirements of the statute, certain safeguards are provided by the statute which are zealously guarded by the courts. Interpreting such statutory provisions courts upon courts have held that an assessment previously framed cannot be reopened on a mere change of opinion. It is stated that power to reopening cannot be equated with review. Bearing in mind these conflicting interests, if we revert back to central issue in debate, it can hardly be disputed that once the Assessing Officer notices a certain claim made by the assessee in the return filed, has some doubt about eligibility of such a claim and, therefore, raises queries, extracts response from the assessee, thereafter in what manner such claim should be treated in the final order of assessment, is an issue on which the assessee Would have no control whatsoever. Whether the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of CIT Vs. Kelvinator of India Ltd., 320 ITR 561. The relevant para is extracted below: We find that, prior to Direct Tax Laws (Amendment) Act, 1987, re-opening could be done under above two conditions and fulfilment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act [with effect from 1st April, 1989], they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to re- open the assessment. Therefore, post-1st April, 1989, power to re-open is much wider. 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 to the Assessing Officer to re-open assessments on the basis of mere change of opinion , which cannot be per se reason to re-open. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to re-assess. But re-assessment has to be based on fulfilment of certain pre-condi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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