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TMI Blog2024 (7) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... ons recorded only referred to the cash deposited in the bank account and there is no reference to any purchase made by the petitioner which are referred to in the report of the Investigation Department. Therefore, AO could not have assumed jurisdiction to issue notice for reopening upon what is recorded by him for reopening the assessment. We are of the opinion that the impugned notice for reopening of the AY 2017-18 is nothing but a change of opinion, in view of the decision of the Hon ble Supreme Court in the case of Kelvinator of India Ltd. [ 2010 (1) TMI 11 - SUPREME COURT ] - The impugned notice issued under Section 148 for reopening of the Assessment Year 2017-18 is hereby quashed and set aside. Decided in favour of assessee. - HONOURABLE MR. JUSTICE BHARGAV D. KARIA AND HONOURABLE MR. JUSTICE NIRAL R. MEHTA Appearance: For the Petitioner(s) No. 1 : Ms Nupur D Shah (10233) For the Respondent(s) No. 1 : None For the Respondent(s) No. 1 : Mr. Varun K. Patel(3802) ORAL ORDER (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) [1] By this petition under Article 226 of the Constitution of India, the petitioner has prayed for the following reliefs: 8.1 That the Hon ble Court be pleas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue compliance was made against all of the notices issued by the Assessing Officer from time to time. [2.6] Ultimately, the assessment order under Section 143 (3) of the Act was framed after thorough scrutiny on 26th December 2019, wherein no addition has been made in respect of the amount cash deposit determining the total income at Rs. 96,91,680/- being returned income as assessed income. The then Assessing Officer, after verification of facts and submissions placed before him by the petitioner such as source of cash deposit in the form of cash book, bank book, month wise cash sales being the source of cash deposits and after application of mind, passed the assessment order dated 26th December 2019 under Section 143 (3) of the Act. [3] The petitioner, thereafter, received notice under Section 148 of the Act dated 30th March 2021 for reopening of the Assessment Year 2017-18. [3.1] That the petitioner has filed Income Tax Return under Section 148 of the Act dated 23rd April 2021 under protest and made compliance with the provisions of the Act. [3.2] Subsequently, the respondent issued notice under Section 143(2) read with Section 147 of the Act dated 21st May 2021 along with reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based upon the amount of Rs. 7.39 Crore deposited in the bank account with the Axis Bank is nothing, but a change of opinion. It was, therefore, submitted that the respondent has not dealt with the contentions raised on behalf of the assessee while rejecting the objections. [10] On the other hand, learned Senior Standing Counsel Mr. Varun K. Patel for the respondent submitted that the impugned notice issued is within the period of four years from the end of the relevant assessment year and on perusal of the reasons recorded, it was pointed out that the petitioner had deposited a huge cash of Rs. 7.39 Crore during the year under consideration in the bank accounts in comparing cash sales for the various periods which noted that the assessee has shown alleged highest cash in the month of October 2016 i.e. just before the demonetization period as compared to other months and on the basis of the fresh information received after completion of the original assessment, which was not available at the relevant time, would go to show that there was no change of opinion in view of the specific information received from the Investigation Wing containing detailed information which was treated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing cash deposited in the bank account by the petitioner and therefore, the impugned notice is nothing but a change of opinion, as held by the Hon ble Apex Court in the case of CIT vs. Kelvinator of India Ltd reported in [2010] (1) 87 taxman 312 (SC) : 320 ITR 561 (SC). It was, therefore, submitted that the Assessing Officer, while framing the assessment under Section 143 (3) of the Act has applied mind on the facts made available on record by the assessee and therefore, the impugned notice is liable to be quashed. [15] Having heard the learned advocates for the respective parties and having considered the facts of the case, the respondent Assessing Officer has recorded the following reasons: Issues as per reasons recorded for reopening As per the information received from the credible sources that the assessee firm has deposited cash of Rs. 7,39,00,000/- during the year under consideration in its bank account vide No. 910020008982526, 915030065781940 and 915030063701995 maintained at AXIS Bank, Bopal Branch, Ahmedabad. The assessee firm has shown cash sale on account of source of cash deposited into the above accounts during the FY 2016-17. It is further worth to mention here that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losing source of cash deposited is out of the cash sales of the assessee s firm and cash on hand balance available on cash book and cash sales made during the Financial Year 2016-17 duly reflected in the books of account. The assessee has also filed further reply providing fresh purchases and sales of all the items with quantity and value for the Financial Year 2016-17 and the relevant Assessment Years 2016-17 and 2017-18 and cash book for the months of October, November and December 2016 during the course of assessment proceedings. Thus, the assessee has disclosed full and true material facts before the Assessing Officer during the original assessment proceedings and the Assessing Officer, after considering such notice, has passed the impugned assessment order dated 26th December 2019 under Section 143 (3) of the Act accepting the return of income of the assessee. [17] In view of the above facts emerging from record, the reasons recorded by the respondent - Assessing Officer is nothing, but mere change of opinion. Learned advocate for the respondent has tried to supplement to the reasons recorded by the report of the Investigation Department at Annexure : R1 to the affidavit-in-re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me 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 Companies against omission of the 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. 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 sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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