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TMI Blog2018 (11) TMI 1007X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. Hence, we quash the re-assessment proceedings and consequent addition made by the AO towards income from house property. - decided in favour of assessee. - I.T.A No.5006 /Mum/2017 - - - Dated:- 16-11-2018 - Shri C.N. Prasad (JUDICIAL MEMBER) And Shri G Manjunatha (ACCOUNTANT MEMBER) For The Appellant : Shri Prakash Jothwani For The Respondent : Shri Abi Rama Kartikeyan ORDER Per G Manjunatha, AM : This appeal filed by the assessee is directed against the order of the CIT(A)-3, Mumbai dated 17-05-2017 and it pertains to AY 2009-10. The assessee has raised the following grounds of appeal:- A) Reopening of assessment 1) The learned Commissioner of Income Tax (Appeals) - 3 (Mumbai) fCIT(A)] erred on facts and in law in upholding the reopening of assessment u/s. 147 by holding that The appellant has not pointed out any reason to invoke Section 147 of the I T Act to reassess the income of the appellant. 2) The learned CIT(A) erred on facts and in law in not considering the submissions of the appellant in connection with the reopening of assessment, 3) The learned CIT(A) erred in not appreciating that there was no fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 07-01-2016. Thereafter, the case has been selected for scrutiny and notices u/s 143(2) and 142(1) of the Act were issued. In response to notices, the authorized representative of the assessee appeared and filed the details, as called for. The assessment has been completed u/s 143(3) r.w.s. 147 on 15-03-2016 determining the total income at ₹ 8,05,26,260 by making addition towards Income from house property of ₹ 5,87,763. 4. Aggrieved by the assessment order, assessee preferred appeal before the CIT(A). Before the CIT(A), the assessee has challenged reopening of assessment on the ground that the assessment has been reopened merely on change of opinion without there being any tangible material which suggests escapement of income. The assessee also challenged the addition made by the AO towards deemed let out value of house property on the ground that determination of annual letting value of house property on the basis of report of Inspector is incorrect. 5. The Ld.CIT(A), after considering relevant submissions of the assessee, rejected legal ground taken by the assessee challenging reopening of assessment by holding that the assessee has not disclosed ful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt years without alleging that there is failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment, reopening of assessment is bad in law and consequent assessment proceedings are liable to be quashed. In this regard, he relied upon the decision of Hon ble Bombay High Court in the case of Sriram Foundry Ltd vs DCIT (2013) 350 ITR 115 (Bom). The Ld.AR also relied upon the decision of Hon ble Bombay High Court in the case of Aroni Commercials Ltd vs DCIT (2014) 362 ITR 403 (Bom). 7. The Ld.DR, on the other hand, submitted that the assessment has been validly reopened by recording reasons, as per which income chargeable to tax had been escaped assessment within the meaning of section 147 of the Act which is clear from the reasons recorded by the AO that the assessee has not disclosed complete particulars of residential house properties in his return of income and even during assessment proceedings u/s 143(3) of the Act. The Ld.DR further submitted that at the time of reopening of assessment, the AO need not prove escapement of assessment and what is needed is a prima facie basis for reopening of assessment which suggests escapement o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in such case, before an assessment can be validly reopened , there must be failure on the part of the assesee to state fully and truly all the material facts necessary for the assessment. This position is further strengthened by a number of judicial precedents, including the decision of Hon ble Bombay High Court in the case of Aroni Commercials Ltd vs DCIT (supra) wherein the Hon ble Court, after considering the ratio laid down by the Hon ble Supreme Court in the case of CIT vs Kelvinator of India Ltd (2010) 320 ITR 561 (SC) held that the power to re-assess cannot be exercised on the basis of mere change of opinion, i.e. if all facts are available on record and a particular opinion is formed, then merely because there is change of opinion on the part of the AO notice u/s 147 / 148 of the Act is not permissible. The relevant observations of the Court are as under:- The common jurisdictional requirement for reopening of assessmentboth -within and beyond a period of four years has to be on the basis of -, reason to believe that income chargeable to tax has escaped assessment and the reason for issuing a notice to reopen are recorded before issuing a notice. However, there is on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son to believe that income chargeable to tax has escaped assessment can come to him from any source, however, reasons for the reopening has to be only of the Assessing Officer issuing the notice. At the stage of issuing notice under section 148 of the Act to reopen a concluded assessment the satisfaction of the Assessing Officer issuing the notice is of primary importance. This satisfaction must be prima facie satisfaction of having a reason to believe that income chargeable to tax has escaped assessment. At the stage of the issuing of the notice under section 148 of the Act it is not necessary for the Assessing Officer to establish beyond doubt that income indeed has escaped assessment. 9. In this view of the matter and respectfully following the case laws discussed above, we are of the considered view that reopening of assessment is bad in law as the AO has reopened the assessment on change of opinion without there being any fresh material which suggests escapement of income and also there is no allegation by the AO that there is a failure on the part of the assessee to disclose fully and truly all the material facts necessary for assessment. Hence, we quash the re-assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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