TaxTMI 
TaxTMI 
2011 (10) TMI 11
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....n the request of the assessee, the reasons on the basis of which the assessment was sought to be reopened have been disclosed under a communication dated 8 April 2010. Those reasons are extracted herein below for convenience of reference: "In this case the assessment for the A.Y. 200506 was comp" leted on 31.12.2007 determining total income at Rs.14,12,92,170/. Subsequently a survey operation u/s. 133A of the Income Tax Act, 1961 was carried out at the business premises of the assessee on 10/09/2009. During the course of survey operation certain documents as per Annexure A1, and A2 were impounded. Also copies of books of account maintained in the computer were taken in a CD and impounded as per Annexure A3. During the course of scrutiny proceedings for the A.Y. 2007-08, extracts of books of account as per the impounded CD were taken for the period relevant to A.Y. 2005-06. The said extracts together with the documents relating to the receipts and cost of production of movies as per the Annexure A1 and A2 were verified with the financial statements filed with the return of income and details filed during the scrutiny proceedings. On verification following discrepancies wer....
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.... 3. The assessee has thereupon been directed to furnish documents, information and details, as the case may be, in order to enable the Assessing Officer to complete the reassessment in accordance with law. The assessee addressed a letter dated 7 July 2010 by which an attempt was made to provide a reconciliation of the impounded books of account and the disclosures made in the return of income. The Assessing Officer by an order dated 25 October 2010 has dealt with the objections of the assessee to the reopening of the assessment and has rejected those objections. 4. Counsel appearing on behalf of the Petitioner submits that the reopening of the assessments for Assessment Years 2005-06 and 2006-07 is on similar grounds and hence, the conclusion which the Court arrives at in the first petition would have to govern the second. On behalf of the Petitioner it has been submitted that; (i) In the reasons disclosed for reopening the assessments for Assessment Years 2005-06 and 2006-07 the Assessing Officer had emphasised that the documents which were impounded during the course of survey operation under Section 133A indicated upon verification certain discrepancies be....
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....d arbitrarily even within a period of four years, for the Income Tax Act, 1961 does not confer upon the Assessing Officer a power to review an assessment once made. A mere change of opinion cannot justify reopening of assessment, but where the Assessing Officer can demonstrate that there was tangible material on the basis of which he had formed the belief that income had escaped assessment, that would furnish jurisdiction to him to reopen assessment. The law on the subject has been formulated in the judgment of the Supreme Court in Commissioner of Income Tax v. Kelvinator of India Ltd. (2010) 320 ITR 561 (SC). thus: "Post 1st April, 1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, section 147 would give arbitrary powers to the Assessing Officer to reopen assessments on the basis of "mere change of opinion", which cannot be per se reason to reopen. 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 fulfillment o....
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....rial consists of material that came into the possession of the department following a survey operation which took place under Section 133A on 10 September 2009. During the course of the survey certain documents came to be impounded. The Assessing Officer noted that during the course of the proceedings for Assessment Year 2007-08 extracts of the books of account which were found in an impounded C.D. were taken for the period relevant to the Assessment Years to which these proceedings relate. These were verified with the financial statements filed with the return of income. Discrepancies have been revealed in respect of three heads in particular : (i) Difference in interest income; (ii) Difference in miscellaneous receipts; and (iii) Cash payment disallowable under Section 40A(3), being payments in excess of Rs. 20,000/. 10. According to counsel appearing on behalf of the assessee, a reconciliation was furnished to the Assessing Officer under cover of the assessee s letter dated 7 July 2010. According to the assessee', the reconciliation would demonstrate that there was no escapement of income. At this stage, the issue before the Court is as to whether there was in....