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TMI Blog2023 (8) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessment, there has to be some fresh tangible material which was not available with the Assessing Officer at the time of original assessment proceedings. In absence of any such fresh tangible material, the re-opening cannot be resorted to since the same would amount to mere change of opinion . Further, the Supreme Court held that mere change of opinion cannot be per se reason to reopen the assessment proceedings which have already been concluded. Thus in the instant facts the re-assessment proceedings have been initiated on a mere change of opinion and hence the same are not liable to be sustained. Accordingly, we direct, that the re-assessment order having been passed on mere change of opinion is liable to be quashed. - Smt. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Appellant : Shri Manish J. Shah Shri Rushin Patel, A.Rs. For the Respondent : Shri Ashok Kumar Suthar, Sr. D.R. ORDER PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax(Appeals)-5, (in short Ld. CIT(A) ), Vadodara in Appeal N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act was completed on 31-03-2014, determining total income at ₹ 1,77,91,657/- after addition of sundry creditors of ₹ 1,63,03,871/-. Aggrieved by the assessment order, the assessee preferred appeal before CIT (Appeals), who dismissed the appeal of the assessee with the following observations:- 5.3 I have carefully considered the facts and the circumstances of the case, observations of the Assessing Officer, submissions of the assessee, material available on the record and the relevant judicial pronouncements on the subject. It is not denied in this case that the assessee had maintained books of accounts, which were audited. It is also noticed that the assessee had refused to furnish the said books of accounts before the Assessing Officer on the plea that the same were destroyed in fire. Absolutely no evidence regarding the genuineness of the sundry creditors was furnished by the assessee either at the assessment stage or during the appellate proceedings. The assessee has all along only asserted that she had filed her Return of Income as per the provisions of section 44ad and once her income has been assessed on estimate basis, no further addition can be made on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer since the same issue regarding non-verification of sundry creditors was raised during the original assessment proceedings and the assessment order was also framed by taking into consideration the fact that the sundry creditors remained unverifiable. Therefore, it is not permissible for the assessing officer to again initiate 147 proceedings on the same set of facts, which would amount to change of opinion , given the facts of the instant case. 6. In response, the Ld. DR placed reliance on the observations made by the Ld. CIT(Appeals) in the appellate order. 7. We have heard the rival contentions and perused the material on record. On going to the facts of the case, we observe that in the reasons recorded for issue notice under Section 148 of the Act, the assessing officer has mentioned that the reason why the instant case has been reopened is that the scrutiny of records reveal that the assessee has furnished no supporting evidence regarding genuineness of 9 sundry creditors for amount involved of ₹ 1,63,03,871/-. This shows that assessee had misrepresented facts in the return of income and had concealed the real income. However, we also observe from notice d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the head sundry creditors may be treated as unverifiable in nature and included to the income of the assessee. In this regard no response from the assessee side has been received. Therefore again a show cause notice dated 18/10/2011 was issued and served to the assessee wherein also it was conveyed that the assessee failed to prove the genuineness of the purchases made with the said parties and was requested to produce copies of original bills of purchases made with the above party, copy of bank statement reflecting the payment made to them and also requested to produce original sales bills and mode of receipt payment from them. In response to show cause letters the assessee has submitted a letter dated 01/11/2011 (as per Annexure-1 to this order). 3.2 From the above it is confirmed that the assessee has made bogus sales and purchases to accommodate buyers and sellers. It is also further confirmed that the assessee has never made any actual business but the figures as reflected in the balance sheet and profit and loss account are manipulated. Further the assessee has not furnished any documentary evidences for verification in respect of the argument that the papers wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L account and cash book. The assessee never bothered to produce the books of accounts, bills and vouchers for verification. Therefore summons u/s 131 of the IT Act was issued to the assessee on 11/11/2011 requiring her to present in the office of the undersigned on 17/11/2011 at 3.00 PM to give evidence and to produce either personally or through an authorized representative, the books of account or other documents. The assessee has not responded to the summons. Again on 25/11/2011 summons u/s 131 of the IT Act was issued to the assessee requiring her to present in the office of undersigned on 02/12/2011. This summons also she has not responded. It is totally negligence on the part of the assessee which proves that she is not willing to come forward with documents substantiating her claim that trading business she carried out during the previous year under assessment as genuine. Further in her letter dated 01/11/2011 she confessed that she has neither purchased any material from supplier nor made actual sales to customers but provided accommodation bills and at the end she apologized not to prove genuineness of purchase of transaction. The assessee totally failed to produce books o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to re-open 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 re-assess. The Assessing Officer has no power to review; he has the power to reassess. But reassessment has to be based on fulfilment of certain pre-condition and if the concept of change of opinion is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, review would take place. One must treat the concept of change of opinion as an inbuilt test to check abuse of power by the Assessing Officer. Hence, after 1-4-1989, Assessing Officer has power to reopen, 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 Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had come to notice of Assessing Officer, and further Assessing Officer had, in fact, made a modification to valuation of first lot of shares during original assessment. The High Court held that on facts, reassessment was not justified. 12. The assessee further relied on the decision of Hon ble High Court of Bombay in the case of Bhavani Gems (P.) Ltd. vs. ACIT 138 taxmann.com 537 (Bombay) . While passing the order the Hon ble Court observed as under:- where assessment was sought to be reopened in case of assessee on ground that assessee had issued shares at excess premium which was required to be added to assessee's income under Section 56(2)(viib), however, very issue of share premium was a subject matter of consideration by Assessing Officer during original assessment proceedings and assessee had provided working of fair value of equity shares as per rule 11UA, reopening of assessment being a mere change of opinion was not justified. 13. In light of the above facts as noted by us and the judicial proceedings on the subject, including the observations made by the Hon ble Supreme Court in the case of Kelvinator India Ltd. (supra), we are of the considered view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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