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TMI Blog2021 (12) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 147 of the Act itself has undergone changes over the years. The legal position emerging on an analysis of the decisions and the legislative changes has been summarized succinctly by the Supreme Court of India in CIT, Delhi v. Kelvinator of India Limited [ 2010 (1) TMI 11 - SUPREME COURT] Similar circumstances in M/s. Sri Jagannath Promoters Builders v. Deputy Commissioner of Income Tax [ 2021 (10) TMI 1216 - ORISSA HIGH COURT] quashed the notice issued u/s 148. The facts of the present case being more or less similar, the impugned notice is hereby quashed. The writ petition is allowed. - W. P. (C) No.13480 of 2014 - - - Dated:- 10-11-2021 - DR. S. MURALIDHAR CHIEF JUSTICE AND A. K. MOHAPATRA, JUDGE Petitioner : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uctions in the sum of ₹ 2,59,000/-. 4. On 16th September, 2013, the impugned notice was issued to the Petitioner Assessee by Opposite Party No.1 under Section 148 of the IT Act stating that he had reason to believe that the income chargeable to tax for AY 2009-10 has escaped assessment. In response to the said notice, the Petitioner sought the reasons for reopening. By a letter dated 3rd July, 2014, Opposite Party No.1 disclosed the reasons, which read as under: On verification of records show that during the previous year relevant to the assessment year 2009- 10, the assessee has shown to have received rebate and discount of ₹ 4,16,123/- from IMFL business and commission of ₹ 1,45,057/- from R.C.I.L. and Reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons begin with the sentence On verification of records.... In other words, it is the same statement of accounts already filed by the Petitioner during the original assessment proceedings under Section 143 (3) of the IT Act that have been revisited by Opposite Party No.1. 8. In respect of each of the lines of business of the Petitioner in the original assessment order, the AO estimated the businesswise profit by observing as under: IMFL Business During the course of assessment proceedings the assessee filed Trading Profit Loss account of IMFL Off shop showing sales at ₹ 3,98,78,474/- and net profit from such business was disclosed at ₹ 12,13,236/-. The assessee has claimed huge expenses under different head ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,000/-] 9. The above analysis reveals that the AO had applied his mind to the documents and records produced before him by the Assessee. This included the balance sheet, P L Accounts and other relevant documents. It is plain, therefore, that the reopening of the assessment was not based on any new material. 10. The law in relation to the reopening of the assessment, particularly after the original assessment was a scrutiny assessment under Section 143 (3) of the IT Act, has been explained in detail in a number of decisions of the Supreme Court of India. Section 147 of the Act itself has undergone changes over the years. The legal position emerging on an analysis of the decisions and the legislative changes has been summarized suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 opinion in Section 147 of the Act. However, on receipt of representations from the Companies against omission of the words reason to believe , Parliamen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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