9911796707
TMI Blog2022 (4) TMI 859X X X X Extracts X X X X X X X X Extracts X X X X ..... approving the reopening proposal. 2.3. The CIT (A) failed to consider the fact that the amount of Rs. 1.5. crores which was paid by the assessee to save him from criminal proceeding has no bearing with his business income of the year and totally penal in nature. 2.4. The CIT (A) erred in following the decision of the Hon'ble Supreme Court in the case of M/s. Kelvinator India Ltd, when no change of opinion could be alleged on a factual situation. 2.5. The CIT (A) omitted to consider the decision of the Hon'ble Supreme Court in the case of ALA firm vs CIT [1991] 189 ITR 285 (SC) which is in favour of the department. 3. For these and other grounds that may be adduced at the time of hearing it is prayed that the order of the learned Commissioner of Income Tax (Appeals) be set aside and that of the Assessing officer be restored. 3. Brief facts of the case are that the assessee was President of M/s.SPB Projects & Consultancy Ltd. He was carrying his own business in consulting and engineering services. The assessee was diverting contracts of the employer company, where he was holding post of President to his own business that ultimately came to the knowledge of employer com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. (2001) 248 ITR 673 and held that note 'not to the assessee' from records of the Assessing Officer implied that he had very clearly and definitely formed an opinion on the issue and thus, reopening of assessment on the very same issue in absence of any fresh tangible material amounts to change of opinion. The relevant findings of the learned CIT(A) are as under:- "5.6 On careful consideration of facts and circumstances as above, my findings on the issue are as under:- 1. The issue of allowability of expenditure was deliberated in the original assessment proceedings. Specific details were called and examined. 2. The Assessing Officer was satisfied with the submissions of the appellant that the expenditure is allowable under Section 37 of the Act as a normal business expenditure. His detailed findings have been reproduced from the "Note Not to the assessee as above. 3. From the sequence of events, it is dear that the Audit Objection was the immediate and proximate cause for the initiation of proceedings under Section 147 of the Act. 4. The Assessing Officer has not brought any fresh / tangible material on record to substantiate his 'reasons to believe". 5. The As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised on behalf of the assessee that it could justifiably be transferred to the head of capital and that he has also accepted this position. Undoubtedly, the main contention that has been pressed before us on behalf of the Revenue is that the Income-tax Officer on the earlier occasion had not formed any! opinion and one of the possible justifications for this argument is perhaps the fact that there is no discussion with regard to this head not is there any significant record in the assessment order. That is the main ground on which learned counsel submitted that where the Tribunal upheld the bar on the ground of change of opinion it presupposes the fact that there was an earlier opinion whereas in his submission there was no earlier opinion which was subsequently changed. We have very carefully dissected this argument and we do find that it would be impossible to uphold it for the simple reason that we have on record the note which very clearly indicates that the attention of the officer had been focused to this very head and that despite this having been done he has upheld the contention of the assessee that the amount could be transferred to the head of capital. It is not for us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Kelvinator of India Ltd. (Supra) is squarely applicable on the facts of appellants case. The issue of allowability of Rs. 1.50 cores was analyzed by the Assessing Officer in the original proceedings and a clear and definite view was taken. The findings of the Assessing Officer are unequivocal and categorical in the "Note" left on the assessment records. Further, the Assessing Officer has brought no fresh tangible material on record to underscore his reasons to believe. It is evident that a new view has been taken on the same set of facts and circumstances and the reason for the change of view is not fresh tangible material, but an audit objection. The action of the Assessing Officer in the reassessment proceedings is nothing but a review of the earlier stand, which is clearly not allowable as per the Law laid down by the Hon'ble Supreme Court in the Kelvinator of India case (supra). In the circumstances, I am in agreement with the views of the id. Authorized Representative that the reassessment proceedings are a mere change of opinion and that there was no valid justification for the initiation of reassessment proceedings The reassessment proceedings therefore stand q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, the Assessing Officer cannot reopen the assessment. Further, present reopening is only on the basis of audit objection, which clearly proves that the Assessing Officer has examined the issue in assessment proceedings which is evident from fact that the Assessing Officer has left a note 'not to the assessee' which clearly shows application of his mind to the facts of the case and thus, in absence of fresh tangible material reopening of assessment amounts to change of opinion, which is not permissible under law. The learned CIT(A), after considering relevant facts has rightly quashed reassessment order passed by the Assessing Officer and his order should be upheld. 7. We have heard both the parties, perused material available on record and gone through orders of the authorities below. The solitary question that needs to be answered in the given facts & circumstances of the case is whether reopening of assessment is based on reasonable belief of escapement, which suggest escapement of income on the basis of fresh tangible material or mere change of opinion on the issue which has been deliberated upon by the Assessing Officer during the scrutiny assessment proceedings. The facts b ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
