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TMI Blog2022 (2) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... t to say that the amount has escaped assessment, also indicates non- application of mind. We would also go a step ahead and observe that if only the approving authority under section 151 of the Act had considered the reasons properly, either he would have directed Respondent No. 1 to re-work on the reasons or would not have granted the approval. This is a case where the scrutiny assessment was completed and order under section 143(3) of the Act has been passed followed by a rectification order under section 154 of the Act. Therefore Petitioner s case has been considered at two stages, (i) When the assessment order was passed after scrutiny under section 143(3) of the Act and (ii) When an order under section 154 of the Act was passed. The re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... Consequently the order rejecting the objections of the Petitioner dated 29th October, 2010 which is also impugned in the Petition also will have to be set aside. 5. The entire basis of forming an opinion that there has been an escapement of assessment is that, the sale of shares of TCS Division by Petitioner was nothing but 'business income' and therefore the profits arising out of the sale of shares held by Petitioner in the group companies would be treated as Petitioner's income from business, and not profits arising out of sale of investment. Therefore, according to Respdt. No. 1 he had reason to believe that a sum of ₹ 22,71,25,79,374/- has escaped assessment. Break up for this figure of ₹ 22,71,25,79,374/- can be found in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning the assessment is based on incorrect facts or conclusions, certainly the notice issued for re-opening cannot be sustained. Moreover, if according to Respondent No. 1 only the sale of shares of TCS was 'business income' and not 'profits arising of sale of investment' to say that the amount of ₹ 22,71,25,79,374/- has escaped assessment, also indicates non- application of mind. We would also go a step ahead and observe that if only the approving authority under section 151 of the Act had considered the reasons properly, either he would have directed Respondent No. 1 to re-work on the reasons or would not have granted the approval. Moreover, we may keep in mind this is a case where the scrutiny assessment was completed and order unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Hon'ble Madras High Court in the case CIT vs. K.S. Venkatasubbiah Reddiar (1996) 221 ITR 181 where it was held that the income tax Act defines the term "business" only inclusively. The two essential requirements for an activity to be considered as "business" are (i) it must be continuous course of activity and (ii) it must be carried on with a profit motive. The issue also came to be considered by the Delhi High Court in the case in Bharat Development Pvt. Ltd. vs. CIT (1982) 133 ITR 4702 where it was observed that the expression "business" is a word of a occupation. In taxing statute, it is used in the sense of a occupation or profession which occupies the time, of making profit. To regard an activity as business there must be a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0) 320 ITR 561., has laid down the test of the principle which reads as under : "Therefore, post 1st April, 1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" falling which, we are afraid, s. 147 would give arbitrary powers to the AO to reopen assessments on the basis of "mere change of opinion", which cannot be per se reason to reopen. We must also keep in mind the conceptual difference between power to review and power to reassess. The AO has no power to review; he has the power to reassess. But reassessment has to be based on fulfillment of certain precondition and if the concept of "change of opinion" is removed, as contended on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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