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TMI Blog2015 (12) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant : Shri Deepak Chopra, Amit Shrivastava, Adv. For the Respondent : Shri Hemant Gupta, SR. DR ORDER Per Prashant Maharishi, AM 1. Parties have preferred captioned cross appeals against the order dated 09.02.2011 of CIT (A)-V, New Delhi for AY 2004-05. 2. First taking up appeal of the assessee, assessee has raised following grounds of appeal -: Based on the facts and circumstances of the case, DuPont India respectfully craves leave to prefer an appeal against the order passed by the Learned Commissioner of Income Tax (Appeal)-V, New Delhi( Ld.CIT(A) ) dated February 09, 2011 under section 250(6) of Income Tax Act, 1961 ( Act ), on the following grounds : 1. Wrongful denial of Advances written off 1.1 That the CIT (A) erred on facts and in law in holding that the appellant failed to provide evidence to show that amounts were already offered to tax in the earlier years. 1.2 That the ld. CIT (A) has erred in law and facts in ignoring the fact that the ld. AO added back the said amount treating it as capital in nature. 2.Wrongful addition on account of Depreciation 2.1. The learned CIT(A) has erred in confirming the action of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Southern Switchgear Ltd. 232 ITR 359. IV. Interest u/s 234B of the I.T.Act has been charges short to the extent of ₹ 6,48,377/-. V. Depreciation on computer has been allowed @ 60% instead of 25% and on electric installations @ 25% instead of 15%. 5. Vide letter dated 9th April, 2009 assessee submitted objection against the notice u/s 148 that no new material has come into possession of the assessee and as all the relevant details are already available on record the proceedings u/s 148 is invalid as it based on mere change of opinion. 6. Before us ld. AR of the assessee submitted that the reasons recorded by the assessing officer are on five counts and each of the issue has been examined by the assessee during the course of assessment proceedings for this. He submitted that notice dated 18.08.2000 covers point no. 6,8,15 and 24 relevant details ask for in original assessment. He also drew our attention that vide letter dated September 06, 2006 assessee has submitted replies of those notices giving complete details. Therefore he submitted that while framing original assessment u/s 143(3) dated 26th December, 2006, AO has applied his mind on the detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e original assessment proceedings AO has examined the details, did not make any adjustments on that account, and subsequently reopened assessment on same issues. All three proposition raised by the AR of the assessee are examined independently as under:- 9. Ld. AR of the appellant has contended before us that reopening has been done at the behest of the audit party. For this he relied on decision of (a) Honorable Supreme court in Indian And Eastern Newspaper society V CIT 1119 ITR 996 and (b) Honourable Delhi high court in Transworld international Inc. v JCIT 273 ITR 242 and Xerox Modi Corp Ltd V DCIT 350 ITR 308 and (c) Honourable Gujarat high court in Rajratna metal Industries Limited V ACIT and Vodafone West Ltd V ACIT 37 Taxmann.com 158 where audit objection is contested but case is reopened. However, AR of the assessee could not produce any evidence before us that the reopening has been initiated at the behest of audit party. Therefore, in absence of any evidence we are afraid we cannot appreciate this proposition and hence, reject it. 10. Second proposition raised by the AR is that there is no new material coming in to the possession of AO after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Supreme Court in Kelvinator of India Ltd. (supra) frowned against such exercise of power: 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 reassessment has to be based on fulfillment of certain pre-condition and if the concept of change of opinion is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of change of opinion as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April, 1989, Assessing Officer has power to re-open, provided there is tangible material to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. 10. This Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of Rajesh Jhaveri (supra) are sought to be relied upon by the revenue to point out the difference between an assessment and an intimation . The context in which those observations were made has to be kept in mind. They were made to point out that where an intimation is issued under section 143(1) there is no opportunity to the assessing authority to form an opinion and therefore when its finality is sought to be disturbed by issuing a notice under section 148, the proceedings cannot be challenged on the ground of change of opinion . It was not opined by the Supreme Court that the strict requirements of section 147 can be compromised. On the contrary, from the observations (quoted by us earlier) it would appear clear that the court reiterated that so long as the ingredients of section 147 are fulfilled an intimation issued under section 143(1) can be subjected to proceedings for reopening. The court also emphasised that the only requirement for disturbing the finality of an intimation is that the assessing officer should have reason to believe that income chargeable to tax has escaped assessment. In our opinion, the said expression should apply to an intimatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new, tangible materials , then the reopening amounts to an impermissible review. Here, there is nothing to show what triggered the issuance of notice of reassessment - no information or new facts which led the AO to believe that full disclosure had not been made. The impugned notice, the AO's order rejecting the objections, and the arguments of the Revenue nowhere indicate how the AO was impelled to seek reopening of the assessee's case, as distinguished from the several other completed assessments. 11. In the case of the assessee during assessment proceedings, Ao asked the pertinent details and Assessee furnished them, AO examined them, and no additions have been made, even then on the same issues reassessment is initiated without any new, tangible material coming in to the possession of AO. 12. Reliance placed by Ld. DR on GRUH Finance Ltd. v. Jt. CIT [2000] 243 ITR 4821, a judgment of the Gujarat High Court, is misplaced and distinguishable. The said case is prior to the decision of Delhi High Court and the Supreme Court in the case of Kelvinator of India Ltd. (supra). The Gujarat High Court has recorded a specific finding that at the time of the original asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reply of assesse dated 06/9/2006 at para no 6 4 Interest u/s 234B is short charged This is the charge to be made by AO while framing assessment order and Interest short charged does not relate to Income 15. Based on above chart it is apparent that there is complete information asked by the AO, assessee replied, and no adverse view was taken. On the same issues now, reassessment notice is issued. Honourable Delhi high court in CIT V Usha International Limited 348 ITR 485 has laid down the following propositions of law: (i) The expression 'change of opinion' postulates formation of opinion and then a change thereof. In the context of section 147, it implies that the Assessing Officer should have formed an opinion at the first instance, i.e., in the proceedings under section 143(3) and now by initiation of the reassessment proceeding, the Assessing Officer proposes or wants to take a different view. (ii) Reassessment proceedings will be invalid in case the assessment order itself records that the issue was raised and is decided in favour of the assessee. Reassessment proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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