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TMI Blog2016 (12) TMI 1097X X X X Extracts X X X X X X X X Extracts X X X X ..... n the present matter also and it has to be held that reassessment cannot be made on a mere change of opinion. - Decided in favor of assessee. Whether the decision of the Supreme Court subsequent to the assessments can be considered a mere change of opinion? - Held that: - a subsequent reversal of legal position by the judgment of the Supreme Court does not authorize the Department to reopen the assessment which stood closed on the basis of law at the relevant time. Cases where no assessment was done earlier - Held that:- If the assessing authority had no occasion to form an opinion during the course of such deemed assessment of the returns filed by the petitioner, and subsequently a notice was issued under Section 31 (1) of the Act, or assessment made under Section 27, albeit on the ground of decision rendered by the Supreme Court, it could not be said that there has been any change of opinion. For the said reason, I am of the view that so far as the remaining eight cases are concerned, the plea of the petitioners regarding change of opinion is not applicable. - Decided against the assessee. - Civil Writ Jurisdiction Case No. 3942 of 2015 - - - Dated:- 14-12-2016 - Ramesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and in the remaining also the returns having been duly filed and accepted, they would be deemed to have been assessed under Section 26 of the Act. Recently, the Supreme Court by its judgment dated 17.12.2014 in the case of State of Punjab and others vs. Nokia India Ltd. held that the mobile/cell phone charger is an accessory to cell phone and is not a part of the cell phone and further held that the battery charger cannot be held to be a composite part of the cell phone but is an independent product which can be separately sold and accordingly, set aside the impugned order of the Punjab and Haryana High Court and confirmed the order passed by the Tribunal. The respective assessing officers of the petitioners thereafter issued notices on 23.01.2015 to the petitioners, referring to the decision of the Supreme Court stating that the charger and other goods sold along with the mobile phone come in the non-specified category but the petitioners had included their price in the value of mobile hand-set and have been paying tax at the rate of 5% and, therefore, they were directed to produce details of the sales of hand-set for the last four years, i.e., for the financial year 2009-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of fact and law not raised and considered by the Supreme Court in Nokia‟s case (supra). In support of the same, learned counsel relies upon the decision of the Apex Court in the case of Bharat Sanchar Nigam Ltd. and another vs. Union of India and others: (2006) 3 SCC 1, in paragraph No. 22 of which it has been held as follows:- 22. A decision can be set aside in the same lis on a prayer for review or an application for recall or under Article 32 in the peculiar circumstances mentioned in Hurra v. Hurra. As we have said, overruling of a decision takes place in a subsequent lis where the precedential value of the decision is called in question. No one can dispute that in our judicial system it is open to a court of superior jurisdiction or strength before which a decision of a Bench of lower strength is cited as an authority, to overrule it. This overruling would not operate to upset the binding nature of the decision on the parties to an earlier lis in that lis, for whom the principle of res judicata would continue to operate. But in tax cases relating to a subsequent year involving the same issue as an earlier year, the court can differ from the view expressed if th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between power to review and power to reassess. The assessing officer has no power to review; he has the power to reassess. But reassessment has to be based on fulfillment of certain precondition and if the concept of change of opinion is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, review would take place. 7. 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 1/4/1989, the assessing officer has power to reopen, 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. Our view gets support from the changes made to Section 147 of the Act, as quoted hereinabove. Under the Direct Tax Law (Amendment) Act, 1987, Parliament not only deleted the words reason to believe but also inserted the word opinion in Section 147 of the Act. However, on receipt of representations from the companies against the omission of the words reason to believe , Parliament reintroduced the said expression and deleted the word opinion on the grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that reasonable grounds exist to believe that any turnover of a registered dealer has escaped assessment. In furtherance of the above, learned counsel further submits that the assessment proceedings on the basis of subsequent decision/ruling would amount to change of opinion and cannot be a ground for reopening the proceedings. Reliance in this regard is placed on a decision of the Supreme Court in the case of Deputy Commissioner of Income-tax vs. Simplex Concrete Piles (India) Ltd.: (2012) 25 taxman 283(S.C.), in paragraph No.3 of which it has been held as follows:- 3. We see no error in the observation made by the Division Bench of the High Court in the impugned judgment that once limitation period of four years provided under Section 147/149 (IA) of the Income Tax Act,1961, (for short the Act‟) expires then the question of re-opening by the Department does not arise. In any event, at the relevant time, when the assessment order got completed, the law as declared by the jurisdictional High Court, was that the civil construction work carried out by the assessee would be entitled to the benefit of Section 80HH of the Act, which view was squarely reversed in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ablish the same. 12. It is established, therefore, that the Assessing Officer and Transfer Pricing Officer were not only aware of the payment of Royalty but had taken the same into consideration at every stage. The Assessing Officer in fact expressly called for the said information. It cannot be held, therefore, that the Assessing Officer was not aware of the Royalty and had not taken the same into consideration before passing the assessment order under Section 143 of the Act. It is also important to note that proceedings had been initiated under Section 154 of the Act by the issuance of a notice dated 24.3.2011. However, the same were dropped holding that it was a debatable issue which would be apparent from the affidavit filed by D.C.I.T. Dated 20.11.2014 in the present case. 13. The impugned notice under Sections 147 and 148, therefore, are clearly based only on change of opinion which is not permissible. Learned counsel also relies upon similar proposition as laid down by different High Courts in the case of Sesa Goa Ltd. vs. Joint Commissioner of Income-tax : (2007) 294 ITR 101 (Bombay), Commissioner of Income-Tax v. Baer Shoes (India) Pvt. Ltd.: (2011) 331 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of the Supreme Court in the case of Nokia (supra) a detailed perusal of the returns of the petitioners both quarterly/annual were made and the same revealed that VAT on the entire sales had been paid at the rate of 4% and accordingly a notice was issued to the dealer to provide sale details of mobile for the said five years 2009-10 to 2014-15 and on the basis of the sale details submitted by the dealer it was evident that the goods had been assessed/deemed to be assessed to tax at a lower rate and accordingly after examination, proceedings of assessment/re- assessment under Section 31 of the Act were initiated. It is further submitted that the law declared by the Supreme Court under Article 141 of the Constitution shall be binding on all courts within the territory of India and therefore, the submission of the petitioner in this regard has no substance with regard to the question of repeated re-assessment. It is submitted that on the basis of Section 31 (1) of the Act, reassessment can be initiated if reasonable grounds exist to believe that the petitioners have been assessed to tax at a lower rate and they did exist as per the reasons recorded in Nokia‟s case (su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsferred to the capital account of the assessee in the assessment year 1988-89 and in accordance with the provisions of Section 155 (4) of the Income-tax Act and the same has to be added because the reserve could have been utilized for the specified purpose after the expiry of 10 years. The basis which was taken by the Income-tax Officer for assuming the jurisdiction under Section 148, therefore, is well founded. The initiation of proceedings cannot be termed without jurisdiction. The assessee has always a remedy of filing an appeal and the Act has provided efficacious machinery. The existence of reasons, a copy of which has already been provided to the petitioner are sufficient for invoking the jurisdiction for reassessment. Learned counsel further relies upon Full Bench judgment of this Court in the case of Bhimraj Madanlal v. The State of Bihar and another (1984) 56 STC 273 Patna, in paragraph No.19 of which it has been held as follows:- 19. To finally conclude- (i) The answer to the question posted at the very outset is rendered in the negative and it is held that information envisaged by Section 18 (1) of the Act for purposes of reassessment need not nece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax Act, 1961. The Court said: (SCC p.666, paras 16-17). We are aware of the fact that strictly speaking res judicata does not apply to income-tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year, unless there was any material change justifying the Revenue to take a different view of the matter. We have considered the submissions of learned counsels for the parties. It would be useful to quote Section 31 of the Bihar VAT Act which is in the following terms:- 31. Assessment or re-assessment of tax of escaped turnover- (1) If the prescribed authority is satisfied, either on the basis of audit conducted under sub- section (3) of Section 26 or otherwise, that reasonable ground exist to believe that, in respect of any assessment under this Act or under the Bihar Finance Act, 1981, (Bihar 5 of 1981) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1987. Taking into account the said Section as a whole including sub-section (2), it is evident that two types of cases are envisaged therein; in both type of cases the prescribed authority must be satisfied that reasonable grounds exist to believe that there has been under assessment or escaped assessment or assessment to tax at a lower rate or any deduction has been wrongly made therein or an input tax credit has been wrongly claimed, in which cases within the statutory period of four years it can make an assessment or reassessment of the tax payable by such dealer. In the first category, such reassessment can be made irrespective of whether the dealer has concealed, omitted or failed to disclose full and correct particulars of such sale or purchase or input tax credit, whereas in the second category there has been such a failure to disclose on the part of the dealer. The same would flow from the harmonious reading of the provisions of sub-section (1) with sub-section (2) of Section 31 of the Act, which obliges the prescribed authority in the second category of cases to impose by way of penalty the sum equal to three times of the amount of tax which is or may be assessed on the tu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 33 of the Act goes to show that any further issuance of notice under Section 31 of the Act in such matters without anything more, except the decision of the Supreme Court in Nokia‟s case (supra) would, on the same materials, amount to a mere change of opinion by the prescribed authority in the matter. Thus, any action on the said basis would clearly be without jurisdiction and therefore without authority of law. That being the position, the plea of alternative statutory remedy would also not come to the rescue of the respondents as in such matters, the Writ Court normally interferes by exercising its power under its extraordinary writ jurisdiction. The law on this point is well settled in the case of Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai and others : (1998) 8 SCC1 and several other decisions. So far as the remaining eight matters are concerned, admittedly they are cases of deemed assessments on the basis of the provisions of Section 26 of the Act or assessment under Section 27. No doubt under Section 25 of the Act, the prescribed authority is required to look into and scrutinize the return filed under Section 24 (1) and (3) of the Act but that i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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