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TMI Blog2024 (8) TMI 1303X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;BLE SHRI JUSTICE BINOD KUMAR DWIVEDI Shri P. M. Choudhari, learned Senior Counsel assisted by Shri Anand Prabhawalkar, learned counsel for the petitioner Ms. Veena Mandlik, learned counsel for the respondents ORDER Per : Vivek Rusia, J Regard being had to the similitude of the controversy involved in Regard being had to the similitude of the controversy involved in these cases, with the joint request of the parties, these petitions are analogously heard and being decided by this common order. Facts of W.P. No.2036 of 2007 are narrated hereunder. The petitioner has filed the present petition under Article 226 of the Constitution of India challenging the notice dated 30.03.2006 issued by respondent No.1 under Section 148 r/w 147 of the Income Tax Act, 1961 for the reopening of the assessment of the year 1999 2000. the petitioner is also challenging the order dated 15.12.2006 passed by respondent No.1 rejecting objections preferred by the petitioner. The petitioner is also challenging the consequential reassessment order dated 28.12.2006 passed by respondent No.1. 02. Facts of the case in short are as follows:- 2.1. The petitioner is a partnership firm duly constituted under the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007 and notice issued for the Assessment Year 2000 2001 is the subject matter of W.P. No.6178 of 2007. Since both the petitions have been on identical facts and grounds, therefore, both are being decided together. 2.6. It is stated in the notice that the petitioner's assessment has been reopened on the ground that respondent No.1 has a reason to believe the income chargeable to the tax has escaped assessment. The petitioner was called upon to furnish a return within thirty days from the date of service of notice. The petitioner submitted an application to supply the reasons for the reopening of the assessment. According to the petitioner, the assessing authority is bound to furnish the reasons within a reasonable time and after receipt of the reasons, the noticee is entitled to file an objection. According to the petitioner, the aforesaid notice has been issued after the expiry of four years from the relevant assessment year. The petitioner was supplied the reasons to show that the assessing authority reopened the assessment only on the ground that the Gross Profit Rate in respect of unrecorded transactions, which has been estimated @ 8% on such sales ought to have been estima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o reassess. The Assessing Officer has no power to review; he has the power to reassess. But reassessment has to be based on the fulfilment of certain preconditions and if the concept of 'change of opinion' is removed, as contented on behalf of the Department, then in the garb of reopening, the review would take place. 4.3. Learned Senior Counsel has also placed reliance passed by the Apex Court in the case of Assistant Commissioner of Income-Tax Others v/s CEAT Limited reported in (2022) 449 ITR 171 (SC), in which assessment was sought to be reopened beyond the period of four years. The reassessment was on a change of opinion and there was no allegation of suppression of material fact. In such circumstances, the reopening notice issued under Section 148 of the Income Tax Act was set aside. 4.4. Reliance has also been placed upon the judgment delivered in the case of Financial Software Systems (P.) Limited v/s Deputy / Assistant Commissioner of Income-Tax reported in (2022) 145 taxmann.com 36 (Mad.), in which it has been held that since at the time of original assessment under Section 143 of the Income Tax Act specific queries were raised by the Assessing Officer which were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment. 5.2. Learned counsel for the respondent further placed reliance in the cases of Income-Tax Officer, Cuttack Others v/s Biju Patnaik reported in (1991) 188 ITR 247 GKN Driveshafts (India) Limited v/s Income Tax Officer Others reported in (2003) 259 ITR 19. Learned counsel has also placed reliance upon several judgments delivered by this Court in the cases of Triple A Trading Investment Private Limited v/s Assistant Commissioner of Income Tax Another (Writ Petition No.942 of 1993), Sundarlal Jain Others v/s Union of India Others reported in (2017) 293 CTR Reports 249 and Neeraj Mandloi v/s Assistant Commissioner of Income Tax Another reported in (2017) 293 CTR (MP) 245. 06. We have heard the learned counsel for the parties at length and perused the record. APPRECIATION CONCLUSION 07. Admittedly, the petitioner filed the return for the Assessment Year 1999, 2000 2001 disclosing its income/loss on the basis of books of account maintained regularly. The petitioner submitted a separate computation sheet disclosing its profit despite unrecorded transactions. The petitioner claimed gross profit @ 7.5% on such unrecorded transactions and 12.5% gross profit in respect of recorded tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ong with the Proviso of Section 147 of the Income Tax Act. Explanation 2 says that the following cases shall be deemed to be cases where the income chargeable to tax has escaped assessment where the income chargeable to tax has been underassessed and such income has been assessed at a too-low rate, but for which there has to be a failure on part of the assessee to make a return under Section 149 of Income Tax Act to disclose fully or truly all material facts necessary for assessment for the relevant Assessment Year. 10. For the sake of repetition, the petitioner had disclosed all his undisclosed sale transactions of both years, but the Assessing Authority has assessed the gross profit @ 8%, thus, there was no failure on the part of the petitioner which can give reasons to believe to the Assessing Officer to reopen the assessment, hence, relying on a judgment passed by the Hon ble Apex Court in case of Kelvinator of India (supra) that Section 147 of Income Tax Act would give arbitrary power to the Assessing Officer to reopen the assessment on the basis of mere change of opinion which cannot be per se reasons to reopen. A similar view has been taken in the case of CEAT Ltd. (supra) a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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