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TMI Blog2021 (1) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... perty i.e. House No. 1057 of 6700 sq. ft. and House No. 1059 of 400 sq. ft. along with the land appurtenant thereto and claimed deduction u/s 54F against the sale of long term shares. The consistent view is that even after amendment of section 147 (w.e.f. 01.04.1989) mere change of opinion does not confer jurisdiction on the Assessing Officer to initiate proceedings for re-assessment merely by resorting to Explanation 1 to that section on the basis of change of opinion. Where, on the same material, the succeeding officer wants to take a different view than taken by the predecessor Assessing Officer and wants to take action u/s 147, such action cannot be sustained because the view taken by the subsequent officer is nothing but a change of opinion. Thus mere change of opinion by Assessing Officer cannot be a ground for reassessment and that amendment of section 147 w.e.f. 01.04.1989 has not altered the position- the Assessing Officer must have reason to believe that income has escaped assessment As the assessee in the instant case disclosed all the primary facts necessary for assessment of its case to the Assessing Officer a mere change of opinion by the AO in the instant ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the buildings are only small area of plot purchased. (iv) That the Ld. CIT(A) erred in not appreciating the fact that the area of residential property purchased is 7100 sq. feet i.e. 6700 plus 400 square feet and not only 400 square feet as misconceived by the Assessing Officer. (v) That the Ld. CIT(A) erred in confirming the action of the Assessing Officer of disallowing the exemption on estimate basis. The appellant submits that disallowance on basis of estimates and presumptions is not warranted and ought to be deleted. (vi) The Ld. CIT(A) erred in confirming the action of the Assessing Officer in charging excess interest u/s.234B at ₹ 86,48,016/-. The appellant submits as per the provisions of the Act, the interest u/s 234B works out to ₹ 45,37,227/-. 3. The 1st ground of appeal is general in nature. We begin with the 2nd, 3rd and 4th ground of appeal which relate to the issue of reopening of assessment. Briefly stated, the facts of the case are that the assessee filed his return of income for the assessment year (AY) 2008-09 on 31.03.2009 declaring total income of ₹ 58,03,49,618/-. Assessment u/s 143(3) was completed by the Assessing Officer (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppurtenant thereto and (v) that the deduction claimed by the assessee is correct and ought to be allowed as claimed. However, the AO was not convinced with the above explanation of the assessee and withdrew claim of ₹ 5,13,41,193/-, thereby restricting the disallowance u/s 54F to ₹ 57,04,578/-. 4. In appeal, the Ld. CIT(A) affirmed the reopening made by the AO on the ground (i) that in computation of income originally filed along with the return of income, it is not clear that there was also an investment in agricultural land; there was no note on such claim of exemption of ₹ 5,70,45,771/- u/s 54F of the Act, (ii)that while making the assessment u/s 143(3), the AO has merely accepted the returned income without any examination of the allowability of claim of deduction u/s 54F, (iii) that in the original assessment order, no specific show cause was issued on the above matter nor was the actual fact verified, (iv) that in the purchase deed/deed of conveyance, there are hidden facts which cannot be noticed unless research is done; for instance, as per the letter dated 29.11.2010 filed by the assessee before the AO, the assessee had purchased residential propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould tantamount to review of own decision and amended section 147 does not authorize the AO to reopen the assessment under the garb of reason to believe to review his own decision. Further explaining that there was no tangible material before the AO on the basis of which the case can be reopened, it is submitted that any different view taken by the AO amounts to change of opinion. On the above, reliance is placed by the Ld. counsel on decision by the Hon ble Bombay High Court in State Bank of India v. ACIT (2018) 96 taxmann.com 77 (Bom) and Marico Ltd. v. ACIT (2019) 111 taxmann.com 253 (Bom) SLP by Revenue dismissed by the Hon ble Supreme Court reported in (2020) 117 taxmann.com 244 (SC). 6. On the other hand, the Ld. Departmental Representative (DR) supports the order passed by the Ld. CIT(A) and files a written submission relying on the decision in PCIT v. Paramount Communication (P.) Ltd. (2017-TIOL-253-SC-IT), PCIT v. Paramount Communication (P.) Ltd. [2017] 392 ITR 444 (Delhi), Indu Lata Rangwalav. DCIT [2016] 384 ITR 337 (Delhi), Thakorbhai Maganbhai Patel v. ITO [2017] 245 Taxman (SC), Thakor bhai Maganbhai Patel v. ITO [2017] 392 ITR 444 (Delhi), Aravali Infrapow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09 it is stated that :- And whereas the vendor is entitled to a portion of the said property bearing Survey No. 465/1 admeasuring 0-63-1 H.A. and Survey No. 465/2 admeasuring 0-63-2 (hereinafter referred to as the said Plot ) along with residential house (hereafter referred to as the said structure ) . (hereinafter the said structure and the said Plot are collectively referred to as the said Premises Further, at page 3 of the said purchase agreement it is mentioned that : Now this INDETURE WITHNESSTH that in consideration of the sum of ₹ 5,75,00,000/- (Rupees Five Crores Seventy Five Lakhs Only) paid by the Purchaser to the Vendor, the Vendor do hereby grant, release, convey, sell, transfer, assign and assure unto the Purchaser forever the said Premises viz. residential house along with the land appurtenant thereto (i.e. the said Plot) being a portion of the said Property bearing Survey No 465/1 admeasuring 0-63-1 H.A and survey No. 465/2 admeasuring 0-63-2 situate at Village Zirad, Taluka Alibag, District Raigad more particularly described in the Third Schedule hereunder written and as shown in red color boundary line on the plan annexed as Annexure A heret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regular assessment for the assessment years 2013- 14 and 2014-15 were completed u/s 143(3) of the Act. Thereafter, the AO issued notices u/s 148 within a period of four years from the end of the relevant assessment year on the ground that deduction allowed to it in value of its advances on account of change in contractual terms, consequent to restructuring of assets, was of contingent nature and did not qualify to be allowed as a loss/deductible expenditure and, thus, income chargeable to tax had escaped assessment. In appeal, the Hon ble Bombay High Court held that since said claim was considered during assessment proceedings and accepted for both years, it was a clear case of a change of opinion and, thus, reassessment notices were without jurisdiction. In Marico Ltd. (supra), while computing book profit u/s 115JB, the assessee claimed deduction of depreciation of ₹ 47.04 crores on account of amortization of brand value being intangible. The AO passed an order u/s 143(3), accepting the assessee s claim for allowing depreciation for amortization of brand value to determine book profits u/s 115JB. However, later on the AO issued notice u/s 148 to reopen the assessment on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on therefore would be completely without jurisdiction in the present facts. Accordingly, the impugned notice is to be quashed and set aside. The SLP filed by the Revenue against the above order has been dismissed by the Hon ble Supreme Court as reported in (2020) 117 taxmann.com 244 (SC). 7.6 It is well settled that mere fresh application of mind to the same set of facts or mere change of opinion does not confer jurisdiction even under the post-1989 section 147. The consistent view is that even after amendment of section 147 (w.e.f. 01.04.1989) mere change of opinion does not confer jurisdiction on the Assessing Officer to initiate proceedings for re-assessment merely by resorting to Explanation 1 to that section on the basis of change of opinion. Where, on the same material, the succeeding officer wants to take a different view than taken by the predecessor Assessing Officer and wants to take action u/s 147, such action cannot be sustained because the view taken by the subsequent officer is nothing but a change of opinion. The Hon ble Supreme Court, while approving reported in 320 ITR 561, the Full Bench decision of the Delhi High Court in CIT v. Kelvinator of India Ltd. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from assessment. Reasons must have a live link with the formation of the belief. Thus mere change of opinion by Assessing Officer cannot be a ground for reassessment and that amendment of section 147 w.e.f. 01.04.1989 has not altered the position- the Assessing Officer must have reason to believe that income has escaped assessment ; the Assessing Officer does not have the power of review on the same set of facts and law. 7.7 What is meant by true and full disclosure ? Law in this regard has been succintly laid down by a Constitution Bench of the Hon ble Supreme Court in Calcutta Discount Co. Ltd. v. ITO (1961) 41 ITR 191 (SC), wherein it is held that : (8)...The words used are omission or failure to disclose fully and truly all material facts necessary for his assessment for that year . It postulates a duty on every assessee to disclose fully and truly all material facts necessary for his assessment. What facts are material, and necessary for assessment will differ from case to case. In every assessment proceeding, the assessing authority will, for the purpose of computing or determining the proper tax due from an assessee, require to know all the facts which help hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of documents and documents, and other evidence, which could have been discovered by the assessing authority, from the documents and other evidence disclosed. (10) Does the duty however extend beyond the full and truthful disclosure of all primary facts? In our opinion, the answer to this question must be in the negative. Once all the primary facts are before the assessing authority, he requires no further assistance by way of disclosure. It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else - far less the assessee - to tell the assessing authority what inferences - whether of facts or law should be drawn. Indeed, when it is remembered that people often differ as regards what inferences should be drawn from given facts, it will be meaningless to demand that the assessee must disclose what inferences - whether of facts or law - he would draw from the primary facts. (11) If from primary facts more inferences than one could be drawn, it would not be possible to say that the assessee should have drawn any particular inference and communicated it to the assessing authority. H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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