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TMI Blog2020 (9) TMI 1090X X X X Extracts X X X X X X X X Extracts X X X X ..... ef facts of the case are that the assessee filed its return of income on 15.06.2010 declaring total income after claiming exemption u/s.12AA r.w.s.11 of the Act, 1961. Thereafter the case was selected for scrutiny and assessment was completed on 03.09.2012 therein the returned income was accepted by the AO. Thereafter the case was selected for scrutiny u/s.148 r.w.s. of the I.T.Act, 1961 after recording reasons and obtaining approval from the competent authority and statutory notices were issued u/s.148 of the Act on 27.03.2017. Subsequently, other statutory notices were also issued to the assessee. The reasons recorded by the AO as under :- "2. Before going ahead, and extract of reasons of reopening the case u/s 147 is given hereunder: "On perusal of record it, revealed that dosing balance of capital fund as on 31.03.2009 was Rs. 1,83,63,024/- but opening balance of capital fund as on 31.03.2010 was taken as Rs. 2,81,68,024. This has resulted into overstatement of capital fund to the tune of Rs. 9805000/- (28168024-183630324) Capital Fund Details :- 31.03.2009 Rs. 18363024/- 31.03.2010 Rs. 28168024/- Unexplained Addition Rs. 9805000/- It was ascertained from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led for the remand report from the AO which was duly confronted before the assessee and rejoinder was also filed by the assessee against the remand report. The CIT(A) after considering the submissions of the assessee and relying some case laws, dismissed the appeal of the assessee. 4. Feeling further aggrieved, the assessee is in appeal before the Income Tax Appellate Tribunal. 5. ld. AR reiterated the submissions made before the CIT(A) and vehemently argued that the reopening of the case which was completed u/s.143(3) of the Act, cannot be reopened merely on the change of opinion without any additional material. It was also submitted by the ld. AR that all the financial documents were furnished before the AO at the time of original assessment on which basis the AO passed order and determined the total income at Nil after giving effect of Section 12AA r.w.s.11 of the Act. From the reasons recorded by the AO, there is no tangible material mentioned by the AO and full and true disclosure was made by the assessee during the course of assessment u/s.143(3) of the Act. Therefore, the case of the assessee cannot be reopened. The details of capital funds received by the assessee were di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substitution of Section 147 of the Income Tax Act, 1961 by Direct Tax Laws (Amendment) Act, 1987? To answer the above question, we need to note the changes undergone by Section 147 of the Income Tax Act, 1961 [for short, "the Act"]. Prior to Direct Tax Laws (Amendment) Act, 1987, Section 147 reads as under: "Income escaping assessment. 147. If- [a] the Income-tax Officer has reason to believe that, by reason of the omission or failure on the part of an assessee to make a return under section 139 for any assessment year to the Income-tax Officer or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, or [b] notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income- tax Officer has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. We 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 re-assessment has to be based on fulfillment of certain pre-condition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April, 1989, Assessing Officer has power to re-open, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to Section 147 of the Act, as quoted hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words "reason to believe" but also inserted the word "opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reasons recorded, the reassessment u/s.147 of the Act is null and void and we quash the reassessment order passed by the AO on legal ground. Since we have already quashed the reassessment order passed by the AO on legal ground, other grounds on merits need no adjudication. Thus, the appeal of the assessee is allowed on legal ground. 10. Now, a procedural issue comes before us that though the hearing of the captioned appeal was concluded on 06.02.2020, however, this order is being pronounced much after the expiry of 90 days from the date of conclusion of hearing. We find that Rule 34(5) of the Income tax Appellate Tribunal Rules, 1962, which envisages the procedure for pronouncement orders, provides as follows: 34(5) The pronouncement may be in any of the following manners: - (a) The Bench may pronounce the order immediately upon the conclusion of hearing. (b) in case where the order is not pronounced immediately on the conclusion of the hearing, the Bench shall give a date of pronouncement. (c) In a case where no date of pronouncement is given by the Bench, every endeavour shall be made by the Bench to pronounce the order within 60 days from the date on which the heari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from time to time. As a matter of fact, even before this formal nationwide lockdown, the functioning of the Income Tax Appellate Tribunal at Mumbai was severely restricted on account of lockdown by the Maharashtra Government, and on account of strict enforcement of health advisories with a view of checking spread of Covid 19. The epidemic situation in Mumbai being grave, there was not much of a relaxation in subsequent lockdowns also. In any case, there was unprecedented disruption of judicial wok all over the country. As a matter of fact, it has been such an unprecedented situation, causing disruption in the functioning of judicial machinery, that Hon'ble Supreme Court of India, in an unprecedented order in the history of India and vide order dated 6.5.2020 read with order dated 23.3.2020, extended the limitation to exclude not only this lockdown period but also afew more days prior to, and after, the lockdown by observing that "In case the limitation has expired after 15.03.2020 then the period from 15.03.2020 till the date on which the lockdown is lifted in the jurisdictional area where the dispute lies or where the cause of action arises shall be extended for a period of 15 da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs DIT [(2017) 392 ITR 244 (Bom)], Hon'ble Bombay High Court did not approve an order being passed by the Tribunal beyond a period of 90 days, but then in the present situation Hon'ble Bombay High Court itself has, vide judgment dated 15th April2020, held that directed "while calculating the time for disposal of matters made time-bound by this Court, the period for which the order dated 26th March 2020 continues to operate shall be added and time shall stand extended accordingly". The extraordinary steps taken suo motu by Hon'ble jurisdictional High Court and Hon'ble Supreme Court also indicate that this period of lockdown cannot be treated as an ordinary period during which the normal time limits are to remain in force. In our considered view, even without the words" ordinarily", in the light of the above analysis of the legal position, the period during which lockout was in force is to excluded for the purpose of time limits set out in rule 34(5) of the Appellate Tribunal Rules, 1963. Viewed thus, the exception, to 90-day time-limit for pronouncement of orders, inherent in rule 34(5)(c), with respect to the pronouncement of orders within ninety days, clearly comes into play in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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