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TMI Blog2024 (3) TMI 665X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment. The reopening of assessment has taken place within a period of four years from the end of the relevant AY. 3. Petitioner is a company incorporated under the Companies Act, 1956 engaged in the business of manufacture and distribution of lubricating oils, greases, brake fluids and specialty products. 4. Petitioner filed its return of income for the AY 2017-18 on 30th November 2017 declaring total income of Rs. 1043,79,64,000/- and made a disallowance of an amount of Rs. 15,27,42,467/- being the CSR amount in consonance with Explanation 2 to Section 37 of the Act. An amount of Rs. 6,18,60,803/- (being 50% of the aggregate donation) was deducted and claimed under Section 80G of the Act. This amount was donation in respect of approved trusts/institutions, for the purposes of Section 80G of the Act. The details of the donations were given in the computation of income, which formed part of the return of income. 5. Petitioner's return of income was selected for scrutiny. Pursuant to initiation of assessment proceedings, notices dated 5th April 2019 and 12th September 2019 were issued under Section 142(1) of the Act seeking details along with supporting evidence including copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iteria. He also submitted that the assessment cannot be reopened on the basis of a change of opinion and the belief so formed must be based on fresh and tangible material having a rational and a live nexus with the belief. Mr. Pardiwalla aligned the legal objections with the facts in the matter by pointing out the following: (i) Petitioner has not claimed the deduction of CSR expenses as business expenditure. (ii) Section 80G of the Act has no condition that such deduction shall not be allowed in respect of amounts spent out of CSR. (iii) The AO has formed his belief regarding escapement of income based on an audit objection without an independent application of mind and had earlier refused to accept the audit objection. (iv) Petitioner had made adequate disclosure regarding expenditure by way of CSR and deduction under Section 80G of the Act is made in the annual accounts, the tax audit report, the computation of income which was already considered by the AO while passing the original assessment order. Deduction under Section 80G of the Act was specifically mentioned in the computation sheet which formed the part of the assessment order. Therefore, it was a clear case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner. Petitioner has explained that no deduction was claimed by it except that under Section 80G of the Act. Copies of receipts of donations were also provided as proof of donation. All these details were also included in the computation of income. Petitioner has, thus, submitted detailed explanation along with supporting documents. It is also seen that Petitioner has claimed deduction for eligible donation as detailed in Schedule. We agree with Mr. Pardiwalla's submission that as far as donations given to eligible trust is concerned, it would still qualify as deduction under Section 80G of the Act even if the contribution is out of the CSR funds. The AO has examined all these aspects while passing the original assessment order. 13. The documents on record also indicate that the Audit Wing of the Department raised certain objections to the original assessment order including the issue of deduction under Section 80G of the Act. It is seen that the AO justified the original assessment order to the audit party without accepting any adjustment to the same. 14. The notice providing the reasons to believe itself is based on verification of the profit and loss account and computation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power is not to be confused with the power to re-assess. The Apex Court in Commissioner of Income Tax, Delhi v. Kelvinator of India Ltd. (2010) 2 SCC 723, has reiterated that mere change of opinion cannot be a ground for reopening concluded assessment. The observations made in paragraphs 6 and 7 read as below: "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............." 17. Similarly, as held by this Court in Aroni Commercials Limited v. Deputy Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration of the Assessing Officer while completing the assessment. It is not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. If an Assessing Officer has to record the consideration bestowed by him on all issues raised by him during the assessment proceeding even where he is satisfied then it would be impossible for the Assessing Officer to complete all the assessments which are required to be scrutinized by him under Section 143(3) of the Act. Moreover, one must not forget that the manner in which an assessment order is to be drafted is the sole domain of the Assessing Officer and it is not open to an assessee to insist that the assessment order must record all the questions raised and the satisfaction in respect thereof of the Assessing Officer. The only requirement is that the Assessing Officer ought to have considered the objection now raised in the grounds for issuing notice under Section 148 of the Act, during the original assessment proceedings. There can be no doubt in the present facts as evidenced by a letter dated 8 September 2012 the very issue of taxability of sale of shares und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inly ignored relevant materials in arriving at an assessment acts contrary to law. The facts in the present case clearly show that the AO was infact in the knowledge of and in possession of all the relevant details regarding the deductions on account of CSR. The computation sheets, the tax audit report, the receipts from the donees and the other relevant documents were all provided and disclosed by Petitioner. It is thus a clear case of 'change of opinion' by the AO. The notice of reopening assessment does not by any measure disclose any material leave aside any information leading to formation of cogent and requisite belief. The finding of the Apex Court in Rajesh Jhaveri (supra) must not be used by AO to reopen assessments to review the original assessment order on the basis of a change of opinion of the AO, as done in the present case. Further, the reasons to believe notice itself indicates that the AO was already seized with information prior to passing of the original assessment order and as such, there is no tangible information on the basis of which he has allegedly formed the requisite belief. 20. In these circumstances, we have no hesitation in holding that the notice dat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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