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TMI Blog2021 (4) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... sequential proceedings are bad in law. 5. The order of reassessment is bad in law and void ab initio for want of requisite jurisdiction especially the mandatory requirement. to assume jurisdiction u/s 148 of the Act did not exist and have not been complied with and consequently the order of reassessment requires to be cancelled in entirety. 6. The order of reassessment is bad in law and void ab inibo since the learned Assessing Officer failed to take mandatory sanction of the competent authority and if obtained, was not in accordance with law. 7. The learned CIT(A) was not justified in appreciating that the reasons recorded do not amount to reason to believe nor reason to suspect, on the facts and circumstances of the case. 8. The learned CIT(A) was not justified in appreciating that the reasons recorded amounted to a mere change of opinion, since the AO has made enquiries in the order passed under section 143(3) on 18.03.2013, which is impermissible in law, on the facts and circumstances of the case. 9. The learned CIT(A) was not justified in appreciating that the reasons recorded are not, reason to believe and that the AO has not formed an independent belief that income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant prays that the appeal may be allowed for the advancement of substantial cause of justice and equity. 2. Brief facts of the case are as under: The assessee is a co-operative bank. It filed its return of income for year under consideration on 30/09/2010 declaring total income of Rs,5,74,66,600/-. The assessment was concluded under section 143(3) of the Act, on 18/03/2013 filed determined taxable income at Rs. 6,67,03,006/-. 3. Subsequently the assessment was reopened under section 147 of the act on the plea that there is escapement of income inasmuch as the claim for standard assets for a sum of Rs. 50 Lacs was wrongly not considered for disallowance by the assessing officer during the original assessment proceedings, and on 14/03/2016, notice under section 148 of the act was issued to assessee in response to which assessee filed letter dated for April 2016 requesting that the return of income filed on 30/09/2010 be treated as return filed in response to notice under section 148. The assessee also requested for reasons recorded to be furnished to assessee. 4. The reasons recorded were communicated to assessee on 05/04/2016 wherein following reasons were recorded: "In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pinion there is no interference needed on the issue. Hence, the ground raised on the issue of reopening assessment and disallowance of the claim for doubtful Standard Asset, is dismissed. 3.7 Secondly, apart from the above, the ratio of Bharat Overseas Bank Ltd vs Commissioner of Income Tax (2013) 152 TTJ 546/82 DTR 373 (Chennai) (Trib), the ratio laid down by ITAT, Ahmedabad (ITA No. 1252/Ahd/2012) dtd 26.07.2013 in the case of Bharuch Dist. Central Co-operative Bank Ltd vs ITO, Ward-1, Bharuch also supports the view taken by the Assessing Officer. 8. On merits the Ld.CIT(A) confirmed the additions made by Ld.AO. 9. Aggrieved by the order of Ld.CIT(A) assessee is in appeal before us now. 10. At the outset the Ld.AR submitted that Ground No. 3-10 are raised challenging the validity of reopening of assessment beyond the period of 4 years. 11. The Ld.AR submitted that Ld.AO initiated the proceedings under section 148 of the act, in respect of the items which were considered by the Ld.AO and the original assessment proceedings. He submitted that issues being subject matter of reasons recorded for reopening were considered by the Ld.AO and the original assessment proceedings. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecords that in the original assessment proceedings due to oversight and inadvertence or a mistake committed by the ITO, the incumbent assessing officer has jurisdiction to reopen the assessment. 16. This itself makes it clear that there was no fresh materials available on record for initiating the reassessment proceedings. The reopening of assessment beyond a period of 4 years have been proceeded with by the Ld.AO based on the material is already available on record. 17. Before us the Ld.Sr.DR placed reliance on to decision by Hon'ble Supreme Court in case of Phool Chand Bajrang Lal vs ITO reported in (1993) 69 Taxmann.com 627 in support of the initiation of reassessment proceedings in the present facts. In our view this decision does not help the argument of revenue as Hon'ble Supreme Court categorically observed that; Acquiring fresh information, specific in nature and reliable in character, relating to concluded assessment which goes to expose the Falcity of the statement made by assessee at the time of original assessment is different from drawing afresh inference in the same facts and material which was available with the ITO at the time of original assessment proceedings. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 concerned (hereafter in sections 148 to 153 referred to as the relevant assessment year)." [Emphasis supplied] 3.1 After enactment of Direct Tax Laws (Amendment) Act, 1987, i.e., prior to 1-4- 1989, section 147 of the Act, reads as under: "147. Income escaping assessment.-If the Assessing Officer, for reasons to be recorded by him in writing, is of the opinion that any 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 and also any othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 1-4-1989, Assessing Officer has power to reopen, 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 "opinion" in section 147 of the Act. However, on receipt of representations from the Companies against omission of the words "reason to believe", Parliament re-introduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the Assessing Officer. We quote herein below the relevant portion of Circular No. 549 , dated 31-10-1989, which reads as follows : "7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression 'reason to believe' in sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AR placed reliance on the decision of Hon'ble Supreme Court in case of Chhugamal Rajpal vs SP Chalihan reported in 79 ITR 603 and decision of Hon'ble Karnataka High Court in case of CIT vs Chaitanya Properties Pvt.Ltd reported in (2016) 67 Taxmann.com 201 in support of his claim that the reasons recorded by Ld.AO do not spell out the escapement of income was due to the failure on part of assessee to fully and truly disclose all material facts necessary for completion of assessment for the relevant year and therefore the reopening of assessment is bad in law. These decision emphasise on the principle that if after expiry of 4 years from the end of the relevant assessment year and actual is sought to be taken under section 147 of the act, such action can in cases where the income chargeable to tax has escaped assessment is by reason of failure on part of assessee to disclose truly and fully all material facts necessary for the assessment for that assessment year. 26. Respectfully following the ratio laid down by various decisions cited hereinabove, more particularly the decision of Hon'ble Supreme Court in case of Hon'ble Supreme Court in case of CIT vs Kelvinator India Ltd. (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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