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TMI Blog2017 (12) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... Subsequent to the completion of assessment proceedings u/s. 143(3), ld. assessing officer again on going through the very same documents formed an opinion that such cash payments are disallowable u/s. 40A(3). This act of the ld. assessing officer squarely falls under the category of “change of opinion” and as observed by Hon’ble Apex Court, assessment u/s. 143(3) cannot be reopened merely for the “change of opinion”. Respectfully following the judgment of Hon’ble Apex Court in the case of CIT vs. Kelvinator of India (2010 (1) TMI 11 - SUPREME COURT OF INDIA and in the given facts and circumstances of the case, we quash the re-assessment proceedings u/s. 147 r.w.s. 148 of the act and restore the order dated 16-11-2009 passed u/s. 143(3) of the act. In the result, this ground of the assessee challenging the re-assessment proceedings is allowed. - Decided in favour of assessee. - ITA No. 2163/Ahd/2014 - - - Dated:- 25-10-2017 - Shri Rajpal Yadav, Judicial Member And Shri Manish Borad, Accountant Member For The Revenue : Shri Rajesh Meena, Sr. D.R. For The Assessee by : Shri S.N. Divetia, A.R. ORDER PER : MANISH BORAD, ACCOUNTANT MEMBER:- This asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly, assessment u/s. 143(3) r.w.s. 147 of the act completed on 02-01-2013 after making addition u/s. 69 of the act of ₹ 6,27,007/-. Income assessed at ₹ 7,41,037/-. 4. Aggrieved assessee preferred appeal before the ld. CIT(A). He lost in the ground challenging the reassessment proceedings. However, on merits, ld. CIT(A) granted partial relief and sustained the addition of ₹ 3,45,678/- by applying the peak of the amount being invested. 5. Aggrieved assessee is in appeal before the Tribunal. Raising two fold contentions (i) challenging the validity of proceedings u/s. 147 of the act and (ii) against sustaining of addition of ld. CIT(A) at ₹ 3,45,678/-. We first take up the ground challenging the validity of reassessment proceedings. Ld. counsel for the assessee submitted that during the course of assessment proceedings u/s. 143(3), all relevant details of creditors along with confirmations were filed. The ld. assessing officer has partly examined these details and completed the assessment. On the basis of very same documents, ld. assessing officer has changed his opinion and reopened the assessment. Such reopening by mere change of opinion has been h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o note the changes undergone by Section 147 of the Income Tax Act, 1961 [for short, the Act ]. Prior to Direct Tax Laws (Amendment) Act, 1987, Section 147 reads as under: Income escaping assessment. 147. If-- [ a] the Income-tax Officer has reason to believe that, by reason of the omission or failure on the part of an assessee to make a return under section 139 for any assessment year to the Income-tax Officer or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, or [b] notwithstanding that there has been no omission or failure as mentioned in clause ( a) on the part of the assessee, the Income- tax Officer has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year concerned (hereafter in sections 148 to 153 referred to as the relevant assessment year). After enac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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. Our view gets support from the changes made to Section 147 of the Act, as quoted hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words reason to believe but also inserted the word opinion in Section 147 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings u/s. 143(3) of the act, assessing officer took a view that even though payments for purchases are made in cash, they are covered by rule 6DD(e)(i) of IT Rules, therefore, no disallowance is called for u/s. 40A(3) of IT Act. Subsequent to the completion of assessment proceedings u/s. 143(3), ld. assessing officer again on going through the very same documents formed an opinion that such cash payments are disallowable u/s. 40A(3) of the act. This act of the ld. assessing officer squarely falls under the category of change of opinion and as observed by Hon ble Apex Court, assessment u/s. 143(3) cannot be reopened merely for the change of opinion . 10. Respectfully following the judgment of Hon ble Apex Court in the case of CIT vs. Kelvinator of India (supra) and in the given facts and circumstances of the case, we quash the re-assessment proceedings u/s. 147 r.w.s. 148 of the act and restore the order dated 16-11-2009 passed u/s. 143(3) of the act. In the result, this ground of the assessee challenging the re-assessment proceedings is allowed. 11. Apropos to the grounds raised on merits against the sustained addition of ₹ 3,45,678/- u/s. 69C of the act, we find no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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