9911796707
TMI Blog2023 (10) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... aluminium scrap. 2.2 The petitioner, on 01/09/2014, filed its audit report in accordance with Section 44B of the Income Tax Act, 1961, disclosing its audited profit and loss account and audited balance sheet for the Assessment Year 2014-15. The petitioner had also filed its Income Tax Return for the Assessment Year 2014-15 on 29.11.2014. As per the said return, the petitioner's gross total income for the Assessment Year 2014-15 was Rs. 47,51,418/- and the total tax paid by the petitioner for the said assessment year was Rs. 14,70,727/-. 2.3 The petitioner was served with a notice dated 06.04.2016 issued by the respondent under Sec. 142(1) of the Income Tax Act, 1961 for scrutiny assessment in the Income Tax Return filed by the petitioner for the Assessment Year 2014-15. The petitioner submitted detailed reply along with all the relevant documents. The then Assessing Officer considered the representation and all the relevant documents submitted by the petitioner and passed an Assessment Order dated 26.08.2016, whereby the assessment was done duly under Section 143(3). 2.4 A notice dated 26.08.2016 of Nil demand was issued in accordance with Section 156 of the Income Tax Act, 1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of his business, in connection with the extension of his undertaking or in connection with his setting up a new unit, the petitioner shall, in accordance with and subject to the provisions of this section, be allowed a deduction of an amount equal to one-tenth of such expenditure for each of the ten successive previous years beginning with the previous year in which the business commences or, as the case may be, the previous year in which the extension of the undertaking is completed or the new unit commences production or operation. 4.2 Although, during the course of assessment proceedings, the petitioner had submitted P&L account, Balance sheet and other details, the scheme of tax evasion was embedded in annual report, audited P&L A/c, balance sheet and books of account in such a manner that it could be detected by the efforts of the AO. It can be reasonably concluded that there is failure on the part of the petitioner to disclose fully and truly all necessary facts during the assessment proceedings. 4.3 Mr. Raval, learned counsel, would submit that the petition being devoid of merits, the same may kindly be dismissed. 5 Having considered the submissions made by the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revenue that there was large increase in cenvat creditors against reduction in business income as compared to the preceding year. That there was mismatch in the amount paid to related persons under section 40A(2)(b) of the act. The petitioner in detail had furnished copies of audited financial accounts, copy of the assessment order of the year 2013-14, details of payments made to persons specified, copy of the ledger, accounts of the loans taken by the company etc. All this material was considered and an assessment order was passed on 26th of August 2016. All these further indicate that after a notice of demand was issued under section 156 of the Income Tax Act, the revenue had raised no demand. After a period of five years, the revenue has thought it fit to reopen the assessment proceedings purportedly under the guise of the same records on the ground that the material embedded in the records could not be discovered. This obviously is the stand taken by the revenue based on change of opinion as the return filed by the petitioner for the Assessment Year 2014-15 was scrutinised under section 143 (3) of the Act. 6.2 Mr Tirth, Naik, rightly in support of his submissions has reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Companies against omission of he words "reason to believe", Parliament re-introduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the Assessing Officer. 8. We quote hereinbelow the relevant portion of Circular No. 549 dated 31st October, 1989, which reads as follows: "7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression 'reason to believe' in Section 147.--A number of representations were received against the omission of the words 'reason to believe' from Section 147 and their substitution by the 'opinion' of the Assessing Officer. It was pointed out that the meaning of the expression, 'reason to believe' had been explained in a number of court rulings in the past and was well settled and its omission from section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended section 147 to reintroduce the expression 'has reason to believe' in place of the words 'for reasons to be recorded by him in writing, is of the opinion'. Other provisions of the new secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lay these fears, the Amending Act, 1989, has again amended Section 147 to reintroduce the expression 'has reason to believe' in the place of the words 'for reasons to be recorded by him in writing, is of the opinion'. Other provisions of the new Section 147, however, remain the same." 9. For the aforestated reasons, we see no merit in these civil appeals filed by the Department, hence, dismissed with no order as to costs." 6.5 What is therefore evident from the case laws cited by the learned advocate for the petitioner is that one must read the concept of change of opinion as an inbuilt test to check abuse of power by the Assessing Officer. Assessing Officer has power to reopen provided there is tangible material to come to the conclusion that there is an escapement of income from assessment. It is a well settled principle of law that reasons must have a live link with the formation of the belief. What is evident from the facts of the cases in absence of a live link between the reasons to believe and the material on record. This court is of the opinion that when all facts were correctly disclosed and were on record during the assessment proceedings for the relevant assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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