2014 (4) TMI 750

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....dated 4.7.2011 issued by the respondent/revenue (hereinafter referred to as "revenue") in exercise of its powers under section 147 and 148 of the Income Tax Act seeking to reopen the assessment for the assessment year 2006-07. 2. The assessee is in the tourism and travel business. By the impugned reassessment notice, the AO was of the opinion that based upon the materials on the record, certain expenses incurred abroad were not disclosed. He therefore sought to use the reassessment proceedings to verify the expenses and thereafter frame a re-assessment. The material portion of the reassessment notice dated 4.7.2011 to the extent it is relevant is extracted below. "1. Assessment in this case was completed under section 143(3) on 26.12.....

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....ed details of the expenses where and to whom payments were made outside India. In the absence of any evidence on records, it is necessary to re-open the assessment for verification of expenses incurred outside India amounting to Rs.114,29,03,442/-. For the verification of genuineness of the expenses, it is extremely necessary to initiate proceedings u/s 148 in the instant case. 2. In view of the above, I have reasons to believe that the income of Rs.114,29,03,442/- chargeable to tax has escaped assessment within the meaning of section 147/148 of the Income Tax Act, 1961." The petitioner had approached this Court earlier by filing writ petition 8685/2010 in respect of the earlier reassessment notice for the same assessment year, dated ....

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.... from the gross receipts. The revenue has filed its counter affidavit urging that the impugned notice in this case does not call for interference and that since liberty was given in the previous order, the reopening of assessment was justified. 4. In Kelvinator of India Ltd. (supra) the Supreme Court stated that the expression "reasons to believe" cannot comprehend a mere change of opinion which would only amount to an impermissible review. The Court held that- ".....Therefore, post-1-4-1989, power to re-open 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 re-open assessments on the ba....