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TMI Blog2019 (5) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... nces from customers which were duly audited by the Chartered Accountant and opined that the appellant/assessee has fully explained the details of the deposits in the Bank Account and therefore, deleted the additions, which according our mind does not suffers from any perversity, illegality and impropriety. Hence, the action of the CIT(A) in non-sustaining of the action of the AO, on merit also does not require any inference and consequently stands affirmed. - Decided against revenue - ITA No.136(Asr)/2015 - - - Dated:- 23-4-2019 - SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER For The Appellant : Sh. Charan Dass (Ld. DR) For The Respondent : Sh. Joginder Singh (Ld. CA) ORDER PER N.K.CHOUDHRY, JM: The instant appeal has been preferred by the Revenue Department against the order dated 19.12.2014 impugned herein passed by the Ld. CIT(A), Jammu u/s. 250(6) of the I.T. Act, 1961 (hereinafter called as the Act ) for Asst. Year:2007-08 whereby the Ld. CIT(A) quashed the assessment order dated 26.02.213 passed by the ITO, Ward 3(3), Srinagar u/s 143(3)/148 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,535/- was made u/s 68 of the Act, which was challenged before the Ld. CIT(A) on the legal grounds as well as on merits. The Ld. CIT(A) vide impugned order dated 19.12.2014 allowed the appeal of the assessee on legal grounds as well as on merit and held the addition under challenge as unjustified and accordingly deleted the same. For the sake of ready reference and brevity the determination part of the order is reproduced herein below. 8. Determination The present appeal is filed by the appellant against the order of the AO making an addition amounting to ₹ 99,43,535/- u/s 68 of the Act. The appellant has contested the addition on both legal grounds as well on merits of the case. Both the contentions of the appellant are adjudicated as under:- The appellant has argued that the reopening of case u/s 148 of the Act is a mere change of opinion and the assumption of jurisdiction by the AO is illegal. The appellant has argued that the deposits in bank account by the appellant were made basis for reopening of the case and those bank deposits have already been considered in the earlier assessment by the then AO who had a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f India Ltd (2002) 256 ITR 1 in which it was held reason to believe that the income chargeable to tax has escaped assessment is one of the conditions precedent for invoking the jurisdiction of the AO to reopen the assessment under s. 147.AO does not have any jurisdiction to review his own order. What cannot be done directly cannot be done indirectly. Thus, he cannot initiate proceedings for reassessment on the basis of mere change of opinion. Circular No. 549, dt.31st Oct., 1989, which is admittedly binding on the Revenue, has clarified that the omission of the expression reason to believe from the amended s. 147 would not give arbitrary powers to the AO to reopen past assessment on mere change of opinion. If it is held that AO can exercise his jurisdiction under s. 147 upon mere change of opinion the same may be held to be unconstitutional and that interpretation has to be avoided. Lack of analysis of the materials on record by itself cannot justify proceedings under s. 147. Reliance is also placed on the judgment of High Court of Delhi in the case of Moser Bear India Pvt. Ltd Vs DCIT (2012)82CCH396 in which it was concluded that the section 147 does not allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has escaped assessment. If the AO had any doubt about the judgment of his predecessor, he could have referred the case u/s 263 of the Act before the Commissioner of Income Tax who has power to decide whether the assessment made earlier was prejudicial to the interests of the revenue or not and could direct fresh assessment, if found necessary. However, there is no such power with the AO to review the assessment made by his predecessor even after taking approval of Joint Commissioner and make fresh assessment on its own if he feels that there is another inference possible from the same documents. Therefore, in my opinion, the reopening of assessment u/s 148 of the Act based on change of opinion is invalid and illegal and any proceedings carried out thereon is also illegal and void ab initio . The ground of appeal of the appellant in relation to challenging the assessment based on validity of reasons recorded is allowed and the assessment order passed by the AO is liable to be quashed . The appellant has also contended that even on merits of the case, the addition u/s 68 of the Act on account of unexplained cash deposits made by the AO is not justified. The appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s allowed. 4. The Revenue Department, on being aggrieved against the impugned order, preferred the instant appeal. 5. Having heard the parties at length and perused the material available on record. From the impugned order, it reflects that the assessee contested and claimed that the addition of ₹ 99,43,535/- has been made as income of the appellant/assessee without considering the earlier assessment orders and without any fresh information or material in hands, which amounts to mere change of opinion and therefore the re-opening of assessment u/s 148 of the Act is not permissible on account of change in opinion. The assessee also relied upon the judgments including of the Apex Court in the case of CIT vs. Kelvinator of India Pvt. Ltd. [2010] 320 ITR 561 (SC). The Ld. CIT(A) thoroughly considered the contentions of the assessee and held that to constitute a valid reason to believe, some new material must come into light with the Assessing Officer and merely a change of opinion cannot constitute reason to believe . Further if the assessee has disclosed basic and all the facts truthfully during the course of assessment and the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or invoking the jurisdiction of the AO to reopen the assessment under s. 147.AO does not have any jurisdiction to review his own order. What cannot be done directly cannot be done indirectly. Thus, he cannot initiate proceedings for reassessment on the basis of mere change of opinion. Circular No. 549, dt.31st Oct., 1989, which is admittedly binding on the Revenue, has clarified that the omission of the expression reason to believe from the amended s. 147 would not give arbitrary powers to the AO to reopen past assessment on mere change of opinion. If it is held that AO can exercise his jurisdiction under s. 147 upon mere change of opinion the same may be held to be unconstitutional and that interpretation has to be avoided. Lack of analysis of the materials on record by itself cannot justify proceedings under s. 147. Hence, we are of the considered view that in the instant case there was no relevant and sufficient material to make satisfaction for initiation the process of re-assessment u/s 147 of the Act hence, we do not find any infirmity, impropriety or illegality in the action of the Ld. CIT(A) in not sustaining the action u/s 147 of the Act by the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ify the documents (list of parties with address) in respect of advances and that same are reflected in audited balance sheet. Further moreover, there is no justification to delete the addition on account of advances against sale of ₹ 80,92,500 (that to not verified) with sales against declared sale at ₹ 9,46,778/- which cannot be at all reasonable. 5.3 From the impugned order it clearly reflects that the proper opportunities have been offered to the Assessing Officer to file the remand report by verifying the documents and claim of the assessee, however, he did not make any effort to do so and ultimately the Ld. CIT(A) not only considered the normal practice of the assessee qua receiving of the advances from the customers as well as audited balance sheets of the preceding and succeeding assessment years but also considered the financial statements of the year under consideration reflected the advances from customers which were duly audited by the Chartered Accountant and opined that the appellant/assessee has fully explained the details of the deposits in the Bank Account and therefore, deleted the additions, which according our mind does not suf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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