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TMI Blog2023 (10) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 u/s 143 (3) of the Act. Once the assessee makes a true and full disclosure of the primary facts at the time of the original assessment and which could have been discovered with due diligence by the Income Tax Officer, drawing an inference which appears subsequently to be alone, is a mere change of opinion with regard to that inference which would not justify the action under the Act. One must read the concept of change of opinion as an inbuilt test to check abuse of power by the AO. AO 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner was served with notice dated 31.03.2021 under Section 148 of the Income Tax Act, 1961. The petitioner was also served a communication dated 09.11.2021, whereby reasons for reopening of assessment were communicated. 2.5 The petitioner vide a letter, submitted its objections against re-opening of assessment proceedings. The respondent passed an order vide communication dated 27.01.2022 disposing the objections raised by the petitioner against the reopening of the assessment proceedings. The petitioner has challenged the notice dated 31.03.2021 and order dated 27.01.2022. 3. Mr. Tirth Nayak, learned counsel appearing for the petitioner, made the following submissions: 3.1 The action of the respondent of reopening of reassessment of the Income Tax Return filed by the petitioner for the Assessment Year 2014-15 is admittedly based on Change of Opinion as the return filed by the petitioner for the Assessment Year 2014-15 was scrutinized under Sec. 143(3) and the said deductions were duly considered and duly allowed by the Assessing Officer and therefore, the same could not be relooked into. 3.2 The impugned order and action of the respondent of reopening asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respective parties, it will be in the fitness of things to reproduce the reasons to believe that the revenue has considered for coming to the conclusion or reason to believe that the assessment has to be reopened. The reasons to believe read as under; 4. In view of the facts as discussed above, it is concluded that the income of Rs. 4,92,673/- has escaped taxation. It was further noticed from the breakup of the other expenses claimed by the assessee that Rs. 1,12,953/- was claimed as expenditure on account of 1/5 of Rs. 5,64,775/- as expenditure for raising fund and Rs. 3,79,720/- as IPO expenditure and was allowed by assessing officer which was in contravention of the provisions of section 35D and was needed to be disallowed but by not doing so it resulted in underassessment. 6. In this case a return of income was filed for the year under consideration and scrutiny assessment u/s. 143(3) of the Income-tax Act was made. During the assessment proceedings, even though, the assessee had produced books of accounts, annual report, P L and Balance Sheet etc., the requisite material facts noted above in the reasons for reopening were embedded in such a manner that the same c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the decision in the case of Parasuram Pottery Works Co. Ltd vs. CIT, reported in (1977) 1 SCC 408, wherein, the Hon ble Supreme Court held that two conditions have to be satisfied before an Income Tax Officer acquires jurisdiction to issue notice under Section 148 of the Act. Once the assessee makes a true and full disclosure of the primary facts at the time of the original assessment and which could have been discovered with due diligence by the Income Tax Officer, drawing an inference which appears subsequently to be alone, is a mere change of opinion with regard to that inference which would not justify the action under the Act. Para 10 of the judgement reads as under: 10. The language of clause (a) of section 147 read with sections 148 and 149 of the Act of 1961 as also the corresponding provisions of the Act of 1922 makes it plain that two conditions have to be satisfied before an Income-tax Officer acquires jurisdiction to issue notice under section 148... . The duty of the assessee in any case does not extend beyond making a true and full disclosure of primary facts. Once he has done that his duty ends. It is for the Income-tax Officer to draw the corre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the new section 147, however, remain the same. 9. For the afore-stated reasons, we see no merit in these civil appeals filed by the Department, hence, dismissed with no order as to costs. 6.4 A Division Bench of this court, in the case of Ganesh Housing Corporation Limited vs. Dy. Commissioner of Income-Tax, Circle 4 Anr., reported in 2012 SCC Online Guj 1633, held as under: 6. We must also keep in mind the conceptual difference between power to review and power to reassess. The assessing officer has no power to review; he has the power to reassess. But reassessment has to be based on fulfilment of certain precondition 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. 7. One must treat the concept of change of opinion as an in-built test to check abuse of power by the assessing officer. Hence, after 1-4- 1989, the 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. Ou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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