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TMI Blog2021 (6) TMI 929X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed u/s 143(3)/147 and addition made therein also gets annulled. - ITA No.3070/Del/2016 - - - Dated:- 31-5-2021 - Shri Sudhanshu Srivastava, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Appellant : Sh. Sanjay Malik, Adv., Sh. Sankalap Malik, Adv. For the Respondent : Sh. N.C.Uppadhay, Sr. DR ORDER PER SUDHANSHU SRIVASTAVA, JM: The appeal is filed by the assessee against order passed by the Ld. Commissioner of Income Tax (Appeals), Dehradun {CIT (A)} vide order dated 28/03/2016 relating to Assessment Year (AY) 2009-10. 1.1 The following grounds of appeal have been raised: 1. That the Ld. CIT (A) erred in holding that the appellant corporation was not set up by a central, state or provisional act for the welfare and economic upliftment of ex serviceman being the citizen of India as required u/s. 10(26BBB) of the Income Tax Act, 1961. 2. That, Ld. CIT (A) and Ld Assessing Officer erred in holding that the appellant was not established by the a central, state or provisional act, both the Ld. A.O. and the CIT (A)erred in justifying that: a. That Uttarakhand Purv Sainik Kalyan Nigam Limited was established ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our years from the end of the assessment year vide notice dated 22/01/2015. The reopening u/s 147 was made on the ground that the assesseee had not fulfilled the pre-condition for claim of exemption u/s 10(26BBB) and the entire claim needs to be disallowed. Eventually, the reassessment proceedings culminated into order passed u/s 143(3)/147 dated 25/02/2015 after making disallowance of the entire claim of exemption u/s 10(26BBB) of the Income Tax Act, 1961. 2.2 The assesseee remained unsuccessful in its appeal before the Ld. first appellate authority. 3.0 The assessee, before us, has effectively raised 6 grounds of appeal out of which ground no. 6 is regarding initiation of penalty u/s 271(1)(c) of the Act which is premature and is hereby dismissed. Further Ground no. 1 to 3 are on merits of the issue of claim of exemption u/s 10(26BBB) and ground no. 4 contains challenge to jurisdiction u/s 147 of the Income Tax Act, 1961. 3.1 As the issue of jurisdiction u/s 147 of the Act is germane for deciding the legality of the assessment order, we are first taking up Ground No. 4 for adjudication. 3.2 The ld. Counsel for the assessee submitted that the issue of exemption u/s 10( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to enable the assessing officer to assume jurisdiction u/s 147 of the Income Tax Act, 1961. As per the law laid down by the Hon ble Apex Court in the case of CIT vs. Kelvinator India Ltd. 320 ITR 561 (SC), it is evident that power under section 147 cannot be exercised for correcting the wrong committed in the original assessment. Further, the action u/s 147 is not in the nature of review but to bring into tax net income which has escaped assessment due to factors beyond the control of the assessing officer at the time of framing the original assessment. The use of term Change of Opinion by the Hon ble Supreme Court makes it abundantly clear that assessing officer has no power to initiate reassessment proceedings u/s 147 in respect of issues which have been dealt with and considered in the original assessment. Further, the requirement of tangible material is in-built check to ensure that there is no review of material already on record. 5.1 In addition to above, in case of reassessment beyond four years from the end of the assessment year, the satisfaction of essential condition of failure on part of the assessee in disclosing and true and full particulars become relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to what facts or material was not disclosed by the assessee leading to income escaping assessment. However, the reasons recorded in the present case fail on this count as well and other than empty statement at the end of the reasons, there is nothing to show that there was any failure in terms of first proviso to section 147 of the Income tax Act, 1961. In fact, on collective analysis of assessment order, notices, responses filed in the original proceedings as well as reassessment order, we do not find any failure attributable to assessee as mandated in first proviso to section147 of the Act. Moreover, no whisper of any fresh tangible material in the reasons further fortifies the fact that entire re-assessment proceedings is based on existing material which was already part of record. 5.5 Thus, it is apparent that action u/s 147 was solely for the purpose of enhancing the disallowance of claim of exemption u/s 10(26BBB) already made in the original assessment u/s 143(3) of the Income tax Act, 1961, which in our view, is impermissible and not in accordance with spirit of section 147 of the Act. The reasons recorded fail to satisfy the dual jurisdictional requirements as per l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Income-tax Officer to draw the correct inference from the primary facts. It is no responsibility of the assessee to advise the Income-tax Officer with regard to the inference which he should draw from the primary facts. If an Income-tax Officer draws an inference which appears subsequently to be erroneous, mere change of opinion with regard to that inference would not justify initiation of action for reopening assessment. . . (p. 7) 10. The principles laid down squarely apply to the facts of the instant case and on the pretext that there was no conscious consideration of the pointed facts at the time of the assessment, reopening of the assessment is not legally permissible by virtue of the proviso to section 147 of the Act. 11. In Mecdermott International Inc. v. Addl. CIT [2003] 259 ITR 138 (Uttaranchal) to which one of us (Hussain, J.) was a party, this court has recently held that an assessment could not be reopened when there was no failure on the part of the assessee to make a full and true disclosure of all material facts. It was reiterated that a reassessment cannot be initiated on the basis of a change of opinion and that Explanation 2 to section 147 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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