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TMI Blog2019 (4) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... ic to AY 1986-87 on the basis of which he could have formed a belief that income has escaped assessment - question answered in favour of the Assessee - ITA 30/2001 - - - Dated:- 1-4-2019 - S. MURALIDHAR AND I.S. MEHTA JJ. Appellant Through: Mr. Inder Paul Bansal with Mr. Vivek Bansal, Advocates. Respondent Through: Mr. Ruchir Bhatia, Sr. Standing Counsel. O R D E R Dr. S. Muralidhar, J.: 1. This appeal under Section 260A of the Income Tax Act, 1961 is filed by the Assessee and is directed against an order dated 31st August 2000 passed by the Income Tax Appellate Tribunal ( ITAT ) in ITA 7484 of 1992 for the assessment year 1986-87. While admitting this appeal on 15th January 2002 the following questions were framed for consideration by this Court: 1. Whether on the facts of the case borne on record, the Appellate Tribunal was right in law in upholding the legal validity of the action of the Assessing Officer in initiating reassessment proceedings against the assessee-appellant company for the assessment year 1986-87 u/s 147/148 of the Income Tax Act, 1961 for its alleged income of ₹ 76,61,408/- on the basis of the observations/ statements of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares and expenses for maintenance of an office at Bulandshahar. According to the AO, he had reasons to believe that income chargeable to tax amounting to ₹ 76,61,408 on account of the aforementioned three items had escaped assessment for assessment year 1986-87. 5. On the basis of the above reopening, a re-assessment order dated 27th March 1992 was passed by the AO adding the aforementioned amount to the returned income of the Assessee for AY 1986-87. Aggrieved by the above reassessment order, the Assessee filed an appeal before the Commissioner of Income Tax (Appeals) [ CIT (A)]. By an order dated 5th August 1992 the CIT (A) dismissed the Assessee s appeal affirming the reassessment order. Thereafter, the Assessee filed ITA 7484 of 1992 before the ITAT. By the impugned order dated 31st August 2000, the ITAT dismissed the appeal. 6. Mr. Inder Paul Bansal, learned Counsel for the Assessee, first submitted that Section 147 as it stood prior to its amendment with effect from 1st April 1989 was applicable in the present case. The said provision as it stood then reads as under: S.147.Income escaping assessment.-If- (a) the (Assessing Officer) has reason to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that income had escaped assessment. He submitted that merely because those very three items were the subject matter of scrutiny for AY 1987-88, the AO decided to reopen the assessment for AY 1986-87. As far as AY 1987-88 is concerned, it is pointed out that after the AO made the additions on the above three items the matter was taken up in appeal to the CIT(A) and thereafter on one aspect to the ITAT. Ultimately, the additions made on all three items were deleted. 8. Mr. Bansal pointed out that for AY 1987-88, specific to the issue of increase in share capital, the CIT (A) had called for a remand report from the AO who in the remand report admitted to the genuineness of the deposits of share capital. He accordingly submitted that since the very basis for reopening the assessment for AY 1986-87 viz., the additions on the said three items AY 1987-88, was rendered non-existent in view of the subsequent developments. Therefore, there could be no justification in persisting with the reopening of the assessment for AY 1986-87. 9. Mr. Bansal relied on the decisions of this Court in Oracle India Pvt.Ltd. v. Assistant Commissioner of Income Tax (2017) 83 Taxman.com 368(Del), HCL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. Thus in the above case, the basis for the re-opening the assessment for AY 2011-12 was not merely the assessment order for the subsequent AY (2012-13) but other material/information which could support the reasons for reopening the assessment. 13. The basic proposition that for the purposes of Section 147 (b) of the Act, there has to be some information available with the AO to justify the reopening of the assessment has not been departed from in any of the decisions cited by learned counsel for the Revenue. The proposition was reiterated in Commissioner of Income Tax, Delhi v. Kelvinator of India Ltd. (supra) that a mere change of opinion cannot be per se a reason to reopen the assessment. The Supreme Court has consistently emphasised the conceptual difference between power to review and power to reassess. It was observed that: One must treat the concept of change of opinion as an inbuilt test to check abuse of power by the Assessing Officer 14. In the present case, the reasons for reopening the assessment do not make any reference whatsoever to any information in possession of the AO that persuaded him to form the belief that for AY 1986-87 income had esca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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