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TMI Blog2021 (9) TMI 323X X X X Extracts X X X X X X X X Extracts X X X X ..... two opinions are possible in respect of a particular transaction and the Assessing Authority formed a particular opinion and passed an Assessment Order and the other opinion later on formed for the purpose of reopening of assessment beyond four years from and out of the same materials without any alteration or change, then such opinion formed at later point of time, undoubtedly to be construed as 'change of opinion'. Failure on the part of the Assessee to disclose fully and truly all material facts - TDS credit pertaining to GTPL was allowed in the hands of Roca India. Therefore, the prerequisite condition as to 'existence of reason to believe that income has escaped assessment by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment' has not been satisfied. As in the Original Assessment Order itself, the Assessment Authority made a finding regarding unabsorbed depreciation of amalgamating company. The details are furnished and the Assessing Authority has taken into consideration of all these facts. The rejection order which is impugned is passed only based on the factual inferences drawn f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sthan High Court praying for the proposal of GTPL merging into the petitioner. The Hon'ble Madras High Court and Hon'ble Rajasthan High Court vide orders in C.P.No.16 of 2008 dated 20.02.2009 respectively, approved the scheme of amalgamation with effect from 01.04.2008. 4. The petitioner states that for the assessment year 2009 -10, the petitioner filed its return of income under Section 139 (1) of Act electronically on 26.09.2009. In the said return of income, the petitioner had claimed set off of the brought forward losses of ₹ 11,06,85,208/- and unabsorbed depreciation of ₹ 4,95,78,646/-. These brought forward losses and unabsorbed depreciation pertain to the petitioner's amalgamating company GTPL. The set off was claimed pursuant to the provisions of section 72A of the Act. 5. The return of income filed by the petitioner was scrutinized and the Assessment Order was passed by the Assessing Officer on 16.01.2014. All these informations and materials submitted were considered elaborately by following the procedures as contemplated under the Income Tax Act and the final assessment order was passed. While so, beyond the period of four years but within s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e claim made by the amalgamating company in their income Tax Return for Assessment Year 2005 06. It may be noted that the difference in the figure of loss as was allowed by the Assessing Officer was due to the fact that there were certain additions / disallowance made in the assessment of the amalgamating company and the same issue was allowed by the Tribunal by setting aside the order of the Assessing Officer. We therefore submit that the claim of loss of ₹ 1,65,44,751/- relating to the Assessment year 2005 06 which is set off as per out Return of Income is in order and no adjustment is required to be made. 8. In another letter dated 28.03.2013 also the petitioner has elaborately stated that as per Section 2 (1B) of the Income Tax Act, 1961, amalgamation , in relation to companies, means the merger of one or more companies with another company or the merger of two or more companies to form one company (the company or companies which so merge being referred to as the amalgamating company or companies and the company with which they merge or which is formed as a result of the merger, as the amalgamated company) in such a manner that - (i) all the property of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the established principles, in view of the fact that the respondents no doubt elaborated the scope of Section 147 in the impugned order. However, in the present case, in the absence of any tangible material and as well as the failure on the part of the assessee, there cannot be any reason for reopening of assessment. Thus, the impugned orders are liable to be set aside. 12. The learned Standing Counsel appearing on behalf of the respondents disputed the contentions by stating that admittedly the reopening of assessment has been initiated beyond the period of four years but within six years. However, the reasons furnished for reopening of assessment are unambiguous that the respondents could able to trace certain new informations from and out of the materials already submitted by the petitioner's and therefore, as per proviso Clause (c) of explanation 2 to Section 147, the respondents are empowered to reopen the assessment. 13. The learned Standing Counsel has drawn the attention of this Court with reference to the reasons furnished as well as the disposal of objections, wherein the respondents have dealt with the scope of Section 2 (1B) of the Income Tax Act, with ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strued that such reopening is violative of proviso Clause (c) of explanation 2 to Section 147 of the Act. 16. Regarding the change of opinion, the principles are considered by the Constitutional Courts in numerous judgments. However, if the materials are already taken into consideration while passing the Assessment Order, as per provision to Section 147 to Explanation (1): the mere production of books of accounts, materials are insufficient, but the deliberation made by the Assessing Officer at the time of Original Assessment would be relevant to form an opinion that, whether the reasons furnished are for change of opinion or otherwise, and two circumstances may be possible. Firstly, from and out of the materials furnished by the Assessee, if any inferences are drawn by the Assessing Officer and such inferences are new informations or materials and the reopening of assessment is initiated within four years, then there may not be any difficulty in invoking the powers of reopening of assessment. 17. In similar circumstances, such inferences are drawn by the Assessing Officer from and out of the materials submitted by the Assessee and deliberations were made, findings are given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n opinion that it is a case of amalgamation. Thereafter, they are again forming an opinion that the transaction does not come under purview of Section 2(1B) of the Income Tax Act and it is an ordinary takeover of business by acquiring shares. Thus, where two opinions are possible in respect of a particular transaction and the Assessing Authority formed a particular opinion and passed an Assessment Order and the other opinion later on formed for the purpose of reopening of assessment beyond four years from and out of the same materials without any alteration or change, then such opinion formed at later point of time, undoubtedly to be construed as 'change of opinion'. 19. Regarding the failure on the part of the Assessee to disclose fully and truly all material facts, the findings in the impugned order states that the Assessing Officer in his Assessment Order dated 16.01.2014 had specifically considered that the quantum of accumulated unabsorbed losses of amalgamating company and restricted the same from INR 16.03 Crores to INR 15.23 Crores. Further, the TDS credit of INR 11.71 Lakhs pertaining to GTPL was allowed in the hands of Roca India. Therefore, the prerequisite co ..... 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