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TMI Blog2019 (3) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings and there was no new tangible material. Court has carefully gone through the order passed by the Tribunal. The aforesaid order makes it very clear that reassessment proceedings by issuing notice u/s 148 were done merely on the basis of change of opinion. There was no tangible material to arrive at a conclusion that there was escapement of income by the assessment. AO has the power to reopen assessment provided there is tangible material to come to a conclusion that there is escapement of income from assessment and the reason must have a live link with formation of belief. In the present case as the reassessment proceedings were initiated on the basis of same material which was available before the AO and mere change of opinion led to reassessment. Department has certainly placed reliance upon a judgment case of Kalyanji Mavji Co., Vs. Commissioner of Income Tax West Bengal reported in [1975 (12) TMI 2 - SUPREME COURT] however, the apex Court in the case of Indian Eastern Newspaper Society [1979 (8) TMI 1 - SUPREME COURT] after taking into account the judgment delivered in the case of Kalyanji Mavji [1975 (12) TMI 2 - SUPREME COURT] has held that change o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax (Appeals) and the CIT(A) vide order dated 21/7/2016 has dismissed the appeal of the assessee. The assessee has thereafter preferred an appeal before the Income Tax Appellate Tribunal and the Tribunal has quashed the re-assessment order. The Income Tax Appellate Tribunal vide order dated 27/9/2017 has held that there was no new material before the Assessing Officer for assumption of valid jurisdiction for initiation of re-assessment proceedings and reopening of assessment u/S. 147 / 148 of the Act. It was also held that reopening was done based upon the same material which was before the Assessing Officer during the regular assessment proceedings and there was no new tangible material. The Tribunal has also held that mere change of opinion does not permit the assessing officer to reopen the assessment proceedings. 11. On careful consideration of the above rival submisions, first of all, we observe that in the present case pertaining to the assissment year 2007-08 the reasons for issuing notice under section 148 of the Act have been recorded on 13-1-2014 i.e. Beyond four years. For the sake of completeness in our findings, the reasons are being reproduced below : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;ble Commissioner of Income Tax, Ujjain, has recorded sanction u/s 151(1) of the IT Act, 1961 for issue of notice u/s 151(1) of the IT Act, 1961 for issue of noticde u/s 148 for the A.Y. 2007-08 though letter F. No. CIT/UJN/TECH/147/2013-14/6197 dated 09.01.2014. 12. On careful and vigilant perusal of the above reasons, we clearly observe that there is no indication in the reasons recorded about the failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment. From para 2 original assessment order we observe that the Assissing Officer has allowed claim of the assessee after calling for required specific information and verifying and examining the same. From the reasons recorded, we are unable to see any new fact, document or evidence before the Assessing Officer as new tangible material was not before the Assessing Officer as new tangible material was not before the Assessing Officer during the original assessment proceedings. Therefore, it is a clear case of change of opinion. 13. In the case of Haryana Acrylic Manufacturing Co. (supra) the Hon'ble Delhi High Court held as under :- ''25. We shall now discus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 50,000/- or more for that year, in which case the period was 16 years. In respect of cases falling under Clause (b) of Section 147, the period of limitation for issuing a notice under Section 148 was four years from the end of the relevant assessment year. Thus, the time limit for issuing a notice under Section 148 where the Income Tax Officer merely had information in his possession to believe that income chargeable to tax had escaped assessment was four years from the end of the relevant assessment year. On the other hand where the Income Tax Officer had reason to believe that income chargeable to tax had escaped assessment for any year and that such reason to believe was occasioned by the omission or failure on the part of an assessee to either file a return or to disclose fully and truly all material facts necessary for his assessment for that year, the period of limitation was either eight years or 16 years depending on whether the income said to have escaped assessment was less or more than ₹ 50,000/- for that year. But, if a notice under Section 148 was contemplated within the period of four years from the end of the relevant assessment year, then it could have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initiation of reassessment proceedings and reopening under section 147/148 of the Act was bad in law. 15. In the case of CIT vs. Fujistu Optel Ltd (supra) their Lordships speaking for the Hon'ble jurisdictional High Court, held as follows :- 6. We have considered the case and find that it is a case in which after filing of the return by the assessee the matter was scrutinized and on thorough examination of the facts, the initial assessment order was passed. On the basis of same set of facts, if the assessing officer was of the view that it was a case of escaped assessment, then it was a case of change of opinion and not a case for reassessment. In the present case, there was no new material before the assessing officer to record a finding that on the basis of some new material, he had formed an opinion that it was a case of escaped assessment and the assessee had not disclosed the fact truly and rightly. On the basis of the material on which the assessment order was passed, the assessing officer could not form another opinion that the original assessment order was an escaped assessment and case deserves to be reassessed under section 147(b), then it was a case of change ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the Tribunal. The aforesaid order makes it very clear that reassessment proceedings by issuing notice u/S. 148 of the Act were done merely on the basis of change of opinion. There was no tangible material to arrive at a conclusion that there was escapement of income by the assessment. Hon'ble the Supreme Court in the case of Commissioner of Income Tax, Delhi Vs. Kelvinator of India Ltd., reported in [2010] 187 Taxman 312 (SC) , in paragraph 4 and 5 has held as under : 4. On going through the changes, quoted above, made to Section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, re-opening could be done under above two conditions and fulfillment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act [with effect from 1st April, 1989], they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to re- open the assessment. Therefore, post-1st April, 1989, power to re-open is much wider. However, one needs to give a schematic interpretation to the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in place of the words `for reasons to be recorded by him in writing, is of the opinion'. Other provisions of the new section 147, however, remain the same. 5. For the afore-stated reasons, we see no merit in these civil appeals filed by the Department, hence, dismissed with no order as to costs. The apex Court in the aforesaid case has held that the Assessing Officer has the power to reopen assessment provided there is tangible material to come to a conclusion that there is escapement of income from assessment and the reason must have a live link with formation of belief. The apex Court in the case of Indian Eastern Newspaper Society Vs. Commissioner of Income Tax reported in [1979] 2 Taxman 197 (SC) , in paragraph 14 has held as under : 14. Now, in the case before us, the Income Tax officer had, when he made the original assessment, considered the provisions of sections 9 and 10. Any different view taken by him afterwards on the application of those provisions would amount to a change of opinion of material already considered by him. The Revenue contends that it is open to him to do so, and on that basis to reopen the assessment under section 147(b). Reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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