TaxTMI 
TaxTMI 
2012 (8) TMI 312
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....essment year 20062007 under Section 148 of the Act (hereinafter referred to as 'the impugned order'). 3 The facts leading to the present petition are as under: a) The Petitioner is engaged in the business of home finance. For the assessment year 20062007 (previous year ending on 31.03.2006), the Petitioner filed its return of income declaring a loss of Rs.9.11 crores. Thereafter, on 31.12.2008, by an order passed under Section 143(3) of the Act, the Assessing Officer assessed the Petitioner, to a loss of Rs.18.24 crores under Section 115(JB) of the Act. b) On 29.12.2009, an audit objection was raised by the Dy. Commissioner of Income Tax (Audit) with regard to the Petitioners assessment to tax for assessment year 20062007. The audit objections were as under: "I) Perusal of the records made available reveal that the assessee bank is engaged in the business of 'Housing Finance'. During the year under review, assessee claims a turnover of Rs. 3,13,47,33,037/. After reducing the direct and indirect expenses the assessee companies' Profit and Loss Account shows a net profit of Rs.12,28,90,685/. However, reading of the computation reveal that the assessee company has c....
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....es held as stockintrade and shares held as investment, has remained to have been followed during the assessment proceedings. Revenue effect can only be worked out after verifying the details of the transactions, hence not quantified." c) On 24.03.2011, the Assessing Officer issued a notice under Section 148 of the Act pointing out that he has reason to believe that income chargeable to tax had escaped assessment for the assessment year 200607 and therefore he proposes to reassess the income for the assessment year 20062007. d) Thereafter at the instance of the Petitioner, on 12.10.2011 the Assessing Officer provided the Petitioner the reasons for issuing of said notice under Section 148 of the Act. The reasons read as under : " Perusal of the records made available reveal that the assessee comapny is engaged in the business of 'Housing Finance'. During the year assessee had a turnover of Rs. 3,13,47,33,037/. After reducing the direct and indirect expenses the company showed a net profit of Rs.12,28,90,685/. However, the computation of income reveal that the company has claimed the following deductions which are 'provisions'/'contingencies' in nature and character: &....
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....lly raised during the assessment proceeding for the assessment year 20062007. Therefore, the notice under Section 148 of the Act was a mere change of opinion and unwarranted. Without prejudice the above, it was pointed out that the reopening of the assessment has been done only at the behest of the audit department and not on independent application of mind. In view of the above, the petitioner requested that the said notice under Section 148 of the Act be withdrawn. f) On 07.12.2011, the Assessing Officer by the impugned order disposed of the Petitioner's objection to reopening of assessment for assessment year 20062007 by the impugned notice. The relevant portion of the reasons recorded in the impugned order read as under : Whereas notice u/s. 148 of the Income Tax Act, 1961(hereinafter referred to as 'the Act') was issued on 24.03.2011 and duly served on the assessee company on 28.03.2011; 2 Whereas objections have been raised by the assessee company, vide its letter dated 28.11.2011 submitted on 29.11.2011 against the issuance of the said notice, which are summarized as under: (I) There is no failure on the part of the assessee to make a return or to disclose fully and....
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....0062007 has been initiated not on any tangible material, but merely on a change of opinion and the same is not permissible. 5 As against the above, Mr. Tejveer Singh, Counsel for the Respondent submits: a) That the present proceeding to reopen assessment for assessment year 20062007 has been commenced by the impugned notice, within 4 years from the end of the relevant assessment year. In such cases, it is his submission that the jurisdiction is very wide and not fettered by the conditions found in the proviso to Section 147 of the Act seeking to reopen an assessment after the expiry of 4 years from the end of the relevant assessment year; b) In case where assessment sought to be reopened is less than 4 years then unless an assessment order deals with a particular issue, the Assessing Officer is free to reagitate the issue even if the same may have been before the Assessing Officer during the assessment proceeding; c) In view of explanation (1) of Section 147 of the Act mere production of evidence during the course of assessment proceeding would not necessarily lead to the conclusion that the Assessing Officer has applied his mind and formed an opinion with regard to the....
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.... 561 has observed that the power to reassess is conceptually different from a power to review. The Assessing Officer under the said Act has only power to reassess on fulfillment of certain precondition namely, he must have reason to believe that income has escaped assessment and that there must be tangible material to come to the conclusion that there is an escapement of income from assessment. The Apex Court cautioned that in the garb of reopening an assessment review should not take place. This court following the Apex Court in the matter of Cartini India Ltd. v. Addl. C.I.T. reported in 314 ITR 275 has also held that even where reassessment is sought to be done within four years from the end of the relevant assessment year, there must be reason to believe that income has escaped assessment and such reason to believe should not be on account of mere change of opinion. Therefore, where facts have been viewed during the original proceeding and an assessment order has been passed then in such cases, reopening of an assessment on the same facts without anything more would be a review and not permitted under the garb of reassessment. This would be a mere change of opinion in the absen....