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TMI Blog2015 (6) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses as on 31.3. 2000 with copies of bills submitted by the parties, before the Assessing Officer during the original assessment proceedings. Thus, there is nothing to suggest that any new fact/information had come to the notice of the Assessing Officer subsequent to the original assessment to acquire jurisdiction by him to initiate reopening proceedings under sec. 147 of the Act. Thus reassessment as invalid and the same has been quashed. - Decided in favour of assesse. - ITA No. 4027/Del/2010, ITA No. 3812/Del/2010 - - - Dated:- 21-5-2015 - SHRI N.K. SAINI AND SHRI I.C. SUDHIR, JJ. For the Appellant : S/Shri Rohit Jain Shika Sharma, CAs For the Respondent : Ms. Sulekha Verma, CIT(DR) ORDER PER I.C. SUDHIR: JUDICIAL MEMBER ITA No. 4027/Del/2010: The assessee has questioned first appellate order on the following grounds: 1. That on the facts and circumstances of the case, the CIT(A) has erred in upholding the validity of the order of the Assessing Officer passed under sec. 143(3) read with sec. 147 of the Income-tax Act, 1961 ( the Act ), without appreciating that the order of Assessing Officer was beyond jurisdiction, bad in law and v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings, the Assessing Officer was having reason to believe that an income of ₹ 2,77,52,000 chargeable to tax has escaped assessment. He submitted that assessee had claimed an expense of ₹ 57,71,65,568.61 on account of construction expenses (civil work) which included an amount of ₹ 2,77,52,000 as provisions for construction. The Assessing Officer in the original assessment proceedings had examined the issue as the assessee had filed all the relevant details/documents on the issue of provisions for construction expenses. The Learned AR referred page No.9 of the paper book i.e. copy of letter dated 25.3.2003 vide which the assessee has submitted details of provisions made for construction expenses as on 31.3.2000 with copies of bills submitted by the parties, before the Assessing Officer. In the said letter, the assessee had categorically submitted that since the company was following accrual concept of accounting, it was mandatory to provide for expenses. It was also clarified that such provision is not ad hoc provision but based on invoices received and against which payment has also been made subsequently. The aforesaid details were filed on the specific di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 482 (Guj.) and CIT vs. S.R. Talwar 305 ITR 286 (All.) relied upon by the Learned CIT(Appeals) having distinguishable facts are not relevant in the present case. 5. The Learned CIT(DR) on the other hand tried to justify orders of the authorities below with this contention that no objection was raised before the Assessing Officer against the validity of initiation of reopening proceedings. The assessee participated in the reassessment proceedings. She submitted that provisions for construction cannot be claimed by the assessee either in mercantile or cash system of accounting. She further pointed out that the documents submitted before the Assessing Officer during the original assessment proceedings vide letter dated 25.3.2003 by the assessee were dated 11.4.2000, 22.6.2000, 25.8.2000 etc. which are after the closure of financial year as on 31.3.2000. The Learned CIT(Appeals) submitted that the Learned CIT(Appeals) has rightly upheld the validity of reassessment framed by the Assessing Officer. She placed reliance on the following decisions: i) CIT vs. PVS Beedies (P) Ltd. (1999) 103 Taxman 294 (S.C); ii) CIT vs. First Leasing Co. of India Ltd. (2001) 118 Taxman 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs in the cases will be hit by the principles of change of opinion . Reassessment proceedings will be invalid in case an issue or query is raised and answered by the assessee in original assessment proceedings but thereafter the Assessing Officer does not make any addition in the assessment order. In such situations, it should be accepted that the issue was examined but the Assessing Officer did not find any ground or reason to make addition or reject the stand of the assessee. He forms an opinion. The reassessment will be invalid because the Assessing Officer had formed an opinion in the original assessment, though he had not recorded his reasons. The expression change of opinion postulates formation of opinion and then a change thereof. The Hon'ble High Court held further that a distinction must be drawn between erroneous application/interpretation/understanding of law and cases where fresh or new factual information comes to the knowledge of the Assessing Officer subsequent to the passing of the assessment order. Again in the case of CIT vs. Orient Craft Ltd. (supra), the Hon'ble jurisdictional Delhi High Court after discussing the issue in detail has come to the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initiate reopening proceedings. It is also pertinent to discuss over here that the decisions relied upon by the Learned CIT(Appeals) in the cases of Gruh Finance Vs. CIT (supra) and CIT vs. S.R. Talwar (supra), having distinguishable facts are not helpful to the revenue. The Learned CIT(Appeals) has rejected the contention of the assessee on the validity of reassessment proceedings on two counts. Firstly that sufficiency of reasons for reopening and assessment does not call for determination at the stage of reopening assessment and secondly though the material were available on record, there was no conscious consideration of the same because there was no application of mind by the Assessing Officer at the time of regular assessment proceedings, therefore, there was no change of opinion by the Assessing Officer. As discussed above, the factual finding of the Learned CIT(Appeals) that there was no application of mind by the Assessing Officer is contrary to the record. However, it has been fairly admitted by the Learned CIT(Appeals) that the materials were already available on record. The facts in the case of Gruh Finance Vs. JCIT (supra) are different as in the present case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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