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TMI Blog2017 (11) TMI 1033X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment, but rather, the corrective jurisdiction under Section 263. That such jurisdiction cannot be exercised for some reasons, would not entitle the revenue to resort to reassessment, which in this case, is nothing but impermissible review. Considering that the reassessment is premised on reasons which were explicitly gone into (evident from queries to the assessee during the original assessment) for previous years, in the three writ petitions, the notices are clearly unsustainable. Non issue of notice - As far as one year, goes additionally, the court notices that reassessment is not permissible, for the reasons articulated in Silverline (2015 (11) TMI 809 - DELHI HIGH COURT). There is no dispute that the revenue had issued a notice under Section 143 (2) but failed to complete the assessment. In these circumstances, the notice is not sustainable on this ground as well. Assessee appeal allowed. - W.P.(C) 422/2006, W.P.(C) 2794/2008, C.M. APPL.5381/2008, W.P.(C) 2795/2008, C.M. APPL.5383/2008, W.P.(C) 8177/2008 - - - Dated:- 16-11-2017 - S. Ravindra Bhat And Sanjeev Sachdeva, JJ. For the Petitioner : C.S. Aggarwal, Sr. Advocate with Sh. Prakash Kumar, Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounting to ₹ 1,73,09,453/- instead of restricting the deduction to the extent of income from the profits and gains of business as has been prescribed in the provisions of section 80AB. This action of the assessee has resulted in under assessment of other income by ₹ 1,73,09,453/-. 2. In W.P.(C) 2794/2008 and W.P.(C) 2795/2008 the reassessment notice issued by the respondent assessee for AY 2003-04 and 2005-06 (both of which had been settled during regular proceedings as scrutiny assessments) was issued. The notice for AY 2003-04 observed that the return was filed, disclosing an income at ₹ 26,93,63,940/-; it had claimed deduction under Section 80-IB of the Act at ₹ 77,89,40,725/ The assessee manufactures mosquito repellants and has also traded, during the year in aerosols, oil spray, hand pumps, mats and coils. It had claimed deduction u/s 80-IB in respect of three units. The AO stated, in the impugned notice that: (a) in Para- (i) of notes of unit-wise Profit and Loss Account, the assessee had stated that trading sales have also been accounted for on the basis of actual sales to customers. The AO said that no separate particulars of trading sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... belief must have a rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the Income Tax Officer and the formation of his belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts. The powers of the Income Tax Officer to reopen assessment, though wide, are not plenary. The words of the statute are reason to believe and not reason to suspect . The reopening of the assessment after the lapse of many years is a serious matter. Learned counsel argued that in all the cases, the reassessment notice was clearly issued, merely to reassess and recalculate the existing materials, without the benefit of any extrinsic evidence or material that came to the knowledge of the AO. Therefore, the reassessment notices were unsustainable. 6. In W.P.(C) 8177/2008, the reassessment notice issued to the assessee by the revenue on 31.03.2008 (for AY 2001-2002) premises itself on the circumstance that in the original assessment, the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the requisite belief....................... 9. It is submitted that the AO acted within jurisdiction in seeking to re-open the assessment, given the fact that the assessments based on original returns, concealed crucial relevant particulars, which were not gone into by the authorities below. Whenever income escapement comes to light, the AO can look into the records to see whether the disclosure made was full and contained material particulars. Learned counsel relied on the decision of this court in Commissioner of Income Tax v Usha International 348 ITR 485 (Del), particularly the following observations: If new facts, material or information comes to the knowledge of the Assessing Officer, which was not on record and available at the time of the assessment order, the principle of change of opinion will not apply. The reason is that opinion is formed on facts. Opinion formed or based on wrong and incorrect facts or which are belied and untrue do not get protection and cover under the principle of change of opinion . Factual information or material which was incorrect or was not available with the Assessing Officer at the time of original assessment would justify i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year: Explanation 1.--Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2. - xxxxx xxxxx xxxxx xxxxx .. 11. This Court notices that Phool Chand Bajrang Lal (supra) is an authority for the proposition that acquisition of fresh information, specific in nature and reliable in character, relating to the concluded assessment which exposes falsity of the assessee s statement during the original statement is a legitimate basis for re-opening (the asssessment). The Supreme Court pointedly noted that the mere disclosure of that transaction at the time of original assessment proceedings, cannot be said to be disclosure of the true and full facts in the case and the I.T.O. would have the jurisdiction to reopen the concluded assessment in such a case. That decision had taken note of Lakhmani Mewal Dass (supra) and Calcutta Discount Ltd. v. ITO [1961] 41 ITR 191. In Calcutta Discount Co. (supra) it was held that the assessee s prime oblig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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