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TMI Blog2018 (9) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act for reopening the assessment u/s. 147 of the Act in the present case was not justified. Reassessment framed by the AO on the basis of invalid notice is set aside. - Decided in favour of assessee - I.T.A.No.58/2012 - - - Dated:- 31-7-2018 - Dr. JUSTICE VINEET KOTHARI And Mrs. JUSTICE S. SUJATHA Appellants: Mr. E.I. Sanmathi, Adv. Respondent: Mr. K.S. Ramabadran, Adv. (Absent) JUDGMENT 1. Revenue has filed this appeal raising purported substantial questions of law under Section 260-A of the Income Tax Act, 1961 arising from the order of learned Tribunal dated 31.10.2011 in ITA No.1006/Bang/2010 for the Assessment Year 2003- 2004 M/s.GMR Holdings Pvt. Ltd., vs. The Deputy Commissioner of Income Tax, Bengaluru. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceding year as well as subsequent year and even while framing the original assessment for the year under consideration, the aforesaid incomes were treated as business income while framing assessment u/s. 143(3) of the Act and the AO not given any reason to deviate from the said view while issuing the notice u/s. 148 of the Act. Assuming there was some mistake in the assessment order dated 30.12.05 and income if any had been taken under a wrong head, that mistake could have been rectified by issuing notice u/s. 154 of the Act, however the reopening of the assessment by issuing the notice u/s. 148 of the Act could have been done only when there was escapement of income. In the present case, the AO nowhere stated that the income of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In view of the above, we are of the considered view that the second objection of the AO in the reasons recorded for reopening the assessment u/s. 147 of the act is totally wrong. 17 xxx 18 xxx 19 xxx 20 xxx 21. In the present case also, the AO issued notice u/s. 148 of the Act, only after the audit party raised certain objections, therefore reopening was not valid in view of the ratio laid down in the aforesaid referred to cases. As regards the initiation of the proceedings for the reassessment u/s. 147 of the Act on the basis of change of opinion, the Hon ble High Court of Delhi (Full Bench) in CIT, Delhi v. Kelvinator of India Ltd. [2010] 187 Taxman 312 (SC) held as under: In the event it is held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, post 1-4-1989, power to re- open is much wider. However, one needs to give a schematic interpretation to the words reason to believe failing which 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. One 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 the reassessment has to be based on fulfillment of certain preconditions 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings by issuing notice under Section 148 of the Act, the AO had initiated proceedings under Section 154 of the Act for the same reasons and proceedings initiated under Section 154 were dropped by him after the issuance of notice under Section 148 and were thus pending on the date of initiation of the re-assessment proceedings. In these circumstances, the Tribunal while setting aside the reassessment proceedings relied upon the Full Bench Judgment of this Court in the case of Kelvinator of India Ltd. (supra) and quoted the following passage from the said judgment: xxx 5. Various other judgments are also referred to by the Tribunal in support of its aforesaid view. 6. In these circumstances, we do not find any substantial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in view of the various judicial pronouncements mentioned hereinabove, we are of the considered view that the notice issued u/s. 148 of the Act for reopening the assessment u/s. 147 of the Act in the present case was not justified. In that view of the matter, the reassessment framed by the AO on the basis of invalid notice is set aside. 31. Since we have decided the legal issue relating to reopening u/s. 147 of the Act in favour of the assessee and reassessment order framed on the basis of notice under section 148 is set aside, no findings are given on the other grounds raised by the assessee on merits. 5. Having heard the learned counsel for Revenue, we are satisfied that no substantial quest ion of law arises in the present c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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