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TMI Blog2023 (8) TMI 447X X X X Extracts X X X X X X X X Extracts X X X X ..... gible material on record that there is escapement of income from assessment. Thus no hesitation in holding that in the absence of tangible material, reopening of assessment after four years period amounts to change of opinion only. Therefore the reopening of assessment is not valid as per the provisions of section 147 - Decided in favour of assessee. - Shri Waseem Ahmed, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member For the Assessee : Shri Nitin Mehta, A.R . For the Revenue : Shri Ashok Kumar S uthar, Sr.D .R. ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the appellate order dated 20.09.2018 passed by the Commissioner of Income Tax (Appeals)-2, Ahmedabad arising out of the reassessment order passed under section 144 r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) relating to the Assessment Year (A.Y) 2010-11. This appeal was originally dismissed wherein the assessee failed to appear before this Tribunal. Thereafter it was recalled Vide M.A. No. 06/Ahd/2023 by order dated 12-05-2023. 2. The brief facts of the case is that the assessee is a Private ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the original proceedings assessment and hence the sustaining of disallowance of deprecation is bad in law. 2. That the Ld. CIT(A) failed to appreciate that the assessing officer has merely made the disallowance of depreciation on the basis that assessee could not submit of user manual of machine but the same had been submitted before the order of reassessment and hence the disallowance is without out any basis. 3. That there is no material or evidence that the depreciation claimed and allowed in original assessment is not allowable expenditure and that all the material and documents are already before the assessing officer in original assessment proceedings duly considered and therefore the CIT(A) has erred in holding in para 2.3 of the order that because of failure on the part of appellant, the assessing officer was justified in reopening the assessment passed u/s 143(3) beyond four years of the assessment. 4. That the Ld. CIT(A) has erred in sustaining the disallowance as the order of the assessing officer is without jurisdiction, bad in law on facts and in law. 5. Ld. Counsel Mr. Nitin Mehta appearing for the assessee submitted before us Ground No. 3 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71,533/-. From the records it was found that on installation of Fluidized bed furnace' for hot air generation valued Rs. 1,03,93,904/- for what assessee claimed depreciation @80 percent amounting Rs. 83,15,123/- and additional depreciation @ 20 percent amounting Rs. 20,78,780/- i.e. in total 100 percent depreciation was claimed and the same was admitted in the assessment. Additional depreciation was admissible only to assessee engaged in production or manufacture of articles or things. In the instant case, as per the submission of the assessee, the Fluidized Bed Furnace was utilized to generate hot air by heat treatment and not for manufacture of articles and things. Thus, generation of hot air does not result in to 'production or manufacture of article or thing' as defined u/s 2(29BA). Furthermore, generating hot air through furnace does not resulting in transformation of object or article or thing having a different name, character and use; or bringing into existence of a new and distinct object or article or thing with a different chemical composition or integral structure. Thus, assessee was not entitled for additional; depreciation of Rs. 20,78,780/-. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een said that the taxes are the price that we pay for civilization. If so, it is essential that those who are entrusted with the task of calculating and realizing that price should familiarize themselves with the relevant provisions and become well versed with the law on the subject. Any remissness on their part can only be at the cost of the national exchequer and must necessarily result in loss of revenue. At the same time, we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity. So far as income-tax assessment orders are concerned, they cannot be reopened on the score of income escaping assessment under Section 147 of the Act of 1961 after the expiry of four years from the end of the assessment year unless there be omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. As already mentioned, this cannot be said in the present case. The ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that Jurisdictional High Court judgment in the case of Rantnamani Metals and Tubes Ltd. Vs. DCIT reported in (2015) 371 ITR 301 (Guj.) quashed the reassessment order on claim of additional depreciation which was reopened after 4 years period observing as follows: ..6. As noticed earlier, the assessment year is 2007-08, whereas the notice under section 148 of the Act has been issued on 27.03.2014 which is clearly beyond a period of four years from the end of relevant assessment year. Under the circumstances, for the purpose of valid assumption of jurisdiction on the part of the Assessing Officer, there has to be a failure on the part of the assessee to disclose fully and truly all material facts. 7. From the facts narrated hereinabove, it is apparent that the petitioner, in the statement of depreciation claimed by it for the year under consideration had clearly shown that it had claimed additional depreciation of Rs. 613.51 lakhs on the wind-mill. Under the circumstances, in the facts of the present case, there was no reason for the Assessing Officer to form the belief that there is failure on the part of the petitioner to disclose fully and truly all material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Assessing Officer has no power to review his assessment order, but has only the power to reassess, provided there is tangible material on record that there is escapement of income from assessment. The relevant portion of the Supreme Court judgment reads as follows: 4. On going through the changes, quoted above, made to section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, reopening could be done under above two conditions and fulfilment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act [with effect from 1- 4-1989], they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to re-open the assessment. Therefore, post 1-4-1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words reason to believe failing which, we are afraid, section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of mere change of opinion , which cannot be per se reason to reopen. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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