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TMI Blog2018 (4) TMI 1376X X X X Extracts X X X X X X X X Extracts X X X X ..... change of opinion on the same facts and circumstances which were already in his knowledge even during the original assessment proceedings. - Decided in favour of assessee - Civil Appeal No. 2732 of 2007 - - - Dated:- 24-4-2018 - R. K. Agrawal And Mohan M. Shantanagoudar, JJ. JUDGMENT R.K. Agrawal, J. 1) The present appeal has been preferred against the impugned final judgment and order dated 24.02.2006 passed by the High Court of Delhi in W.P.(C) No 14376 of 2005 whereby a Division Bench of the High Court, while allowing the petition filed by the Respondent herein, quashed the notice dated 10.02.2005 issued under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as the IT Act ) and the order dated 17.08.2005 passed by the Income Tax Officer. 2) Brief facts:- (a) M/s TechSpan India Private Ltd.-the Respondent is a private limited company incorporated under the Companies Act, 1956 and is engaged in the business of development and export of computer softwares and human resource services. It is also relevant to mention here that the Respondent-Company is also eligible for deduction under Section 10A of the IT Act. (b) On 25.10.2001, the Responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt is whether the re-opening of the completed assessment is justified in the present facts and circumstances of the case? Rival contentions:- 5) Learned counsel for the Appellant contended that the Assessing Officer (AO) was well within his powers to issue the show cause notice under Section 148 as the deduction that was allowed under Section 10A was in excess and had escaped assessment for which re-assessment proceedings can be issued under Section 147. He further contended that the High Court has erroneously held that the re-assessment proceedings initiated under Section 147 of the Act are illegal and not sustainable in the eyes of law. Learned counsel finally contended that the impugned judgment of the High Court is erroneous in the eyes of law and is liable to be set aside. 6) Learned counsel appearing on behalf of the Respondent submitted that the ground for re-assessment proceedings under Section 147 in the present case is nothing but merely a change of opinion on the same material facts of the case and no new fact has come to the knowledge of the Appellant enabling the said authority to initiate re-assessment proceedings under the IT Act, and therefore, the High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed, and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139: x x x x x x (2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so. The language of Section 147 makes it clear that the assessing officer certainly has the power to re-assess any income which escaped assessment for any assessment year subject to the provisions of Sections 148 to 153. However, the use of this power is conditional upon the fact that the assessing officer has some reason to believe that the income has escaped assessment. The use of the words reason to believe in Section 147 has to be interpreted schematically as the liberal interpretation of the word ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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. 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 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. 12) Before interfering with the proposed re-opening of the assessment on the ground that the same is based only on a change in opinion, the court ought to verify whether the assessment earlier made has either expressly or by necessary implication expressed an opinion on a matter which is the basis of the alleged escapement of income that was taxable. If the assessment order is non-speaking, cryptic or perfunctory in nature, it may be difficult to attribute to the assessing officer any opinion on the questions that are raised ..... X X X X Extracts X X X X X X X X Extracts X X X X
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