TaxTMI 
TaxTMI 
2013 (6) TMI 628
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....d its return of income for the AY 1998-99 on 30/10/1998 disclosing NIL income and the same was processed u/s 143(1)(a) in summary manner. The Assessing Officer also passed order u/s 143(3) of the Act accepting the NIL returned income. Subsequently, the Assessing Officer noticed that the assessee society's profits of Rs. 6,156,000/- were diverted to the account of its General Secretary, Sri S.V. Rao, for construction of a building, wherein the General Secretary's proprietary business was being carried on. The Assessing Officer formed the reason to believe that income had escaped assessment by way of assessee's failure to disclose fully and truly all material facts before the Assessing Officer. The relevant findings of the Assessing Officer i....
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.... cited by the President (264 ITR 566 (SC) is totally irrelevant in that there was no change of opinion nor disclosure of all material facts by the assessee, in the instant case." The Assessing Officer, therefore, reassessed the assessee's income at Rs. 1,01,230/- 3. On appeal, the CIT(A) confirmed the order of the Assessing Officer. 4. Still aggrieved, the assessee is in appeal before us and has raised the following grounds of appeal: "1. The order of the learned CIT(A) is erroneous both on facts and in law. 2. The learned CIT(A) erred in holding that the proceedings u/s 147 are valid particularly when the notice was issued after a period of four years; when there is no fresh material before the Assessing Officer to show that....
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.... contended that reopening of the said assessment by issuing notice u/s 148 of the Act was based on the change of opinion after a lapse of 4 years from the end of the relevant assessment year was null and void by virtue of section 147 of the IT Act. For this proposition, the learned counsel relied upon the judgment of Hon'ble Supreme Court in the case of CIT Vs. Kelvinator of India Ltd., [2010] 320 ITR 561 wherein it was held that "After 1 s t April, 1989, Assessing Officer has power to reopen the assessment u/s 147 provided Assessing Officer has reason to believe that income has escaped assessment and there is tangible material to come to the conclusion that there is escapement of income; mere 'change of opinion' cannot per se be reason to ....
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.... exempt u/s 10(22) of the IT Act. The above information is furnished in response to your letter dt. 11/01/1999." Contents of the letter dated 16/01/2001 "Kind reference is invited to the discussions, the assessee's representatives had during the course of earlier hearing. In continuation of the said discussions, the assessee may be permitted to submit the following further information: 1. A copy of the account of Shri S.V. Rao is submitted for perusal of the Assessing Officer. There are no transactions during the previous year. The balance of Rs. 2,49,064 represents the balance brought forward. This amount represents the loan taken from Shri S.V. Rao. 2. Building advance of Rs. 6,15,000/- was paid to Shri S.V. Rao for constructi....
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....of Shri SV Rao and Special Coaching Center are put together, there is a credit balance. Details of advertisement are submitted. In view of the above, the assessee requests the Assessing Officer to kindly complete the assessment." 8. The learned counsel has taken a plea before us that assessment cannot be reopened without any tangible fresh material to show that the assessee has concealed any information which is required for the purpose of assessment. In our opinion, there is sufficient force in the contention of the learned counsel raised on behalf of the assessee that material facts are fully and truly disposed of by the assessee as evidenced by the above two letters filed at the time of completion of original assessment. The Ass....