TaxTMI 
TaxTMI 
2014 (7) TMI 1061
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.... without appreciating that as per section 147 of the Act, the Assessing Officer has the power to assess or re-assess such income and also any other income chargeable to tax which has escaped assessment and which has come to his notice subsequently. The Hon'ble Apex Court in its decision in the case of Shri Krishna Pvt. Ltd. vs ITO, 221 ITR 538, wherein it is held that although the AO could have investigated the truty of the claim in the earlier assessment year itself, that did not relieve the assessee of its obligation to disclose fully and truly all material facts. Further, the plea of "change of opinion' was raised during the appellate proceedings and during the course of assessment proceedings." 2. Facts in brief as emerged from....
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....ssessee had challenged the reopening of the assessment before learned CIT(A) and that legal plea of the assessee was accepted by learned CIT(A) in the following manner: "5. I have considered the submissions of the Id. A.R. and the facts of the case. The assessment record was called for and examined. I find from the case records that the entire details relating to sub-contract expenses of Rs. 1,03,71,416/- had been filed at the time of original assessment u/s 143(3). Copy of the ledger account showing details of party, date of payment, amount, etc. were all available with the Assessing Officer. Once this issue relating to the genuineness or otherwise of sub-contract expenses had been looked into at the assessment stage and there was due app....
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....section (147) merely because he happens to change his opinion or to hold an opinion different from that of his predecessor on the same set of facts". The Supreme Court has held that the assessment cannot be reopened only because of change of opinion (CIT Vs. Bhanji Lavji, 79 ITR 582). The Chandigarh Bench of the IT AT has further elaborated and stated that section 147 does not authorize the A.O. to reopen the assessment under the garb of "reason to believe" in order to review his own decision (CIT Vs. Smithkline Beecham Consumer Brands Ltd., 126 Taxman 104). 5.3 Having regard to the information available on record and the facts of the case, I am of the opinion that the reopening of the assessment u/s 147 could not be justified. All the act....
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....said income had escaped from assessment. According to him, the reopening was justifiable as per law; hence, the order of learned CIT(A) should be reversed. 5. From the side of the respondent assessee, learned AR, Mr. S.N. Soparkar appeared and vehemently argued that during the course of original assessment proceedings whatever inquiries were raised in respect of the impugned amount were duly complied with and then after considering the nature of the expenditure the AO had formed an opinion not to tax the same. Learned AR has drawn our attention on the return filed along with annual accounts. He has informed that as per the trading account the assessee had disclosed "road work" receipts of Rs. 2,79,82,553/- and the "work expenses" claim of ....
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....r examination of the case; which is not permissible. He has supported the order of learned CIT(A) on the ground that under the law even when a reopening was done within one year, the AO is not empowered to change an opinion which has already been formed during the passing of the original assessment order. Reliance was placed on the case laws as listed below: "1. Ashwamegh Co-Operative Housing Society Ltd. Vs. DCIT and Another, (2013) 353 ITR 413 (Guj.) 2. Arvind Polycot Ltd. Vs. Chandra Ram, (2013) 353 ITR 511 (Guj.) 3. Vodafone West Ltd. Vs. ACIT (No.3), (2013 354 ITR 572 (Guj.) 4. Gujarat Power Corporation Ltd. Vs. ACIT, (2013) 350 ITR 266 (Guj.) 5. Commissioner of Income Tax Vs (1)Kelvinator of India Ltd., (2010) 320 ITR 561 (SC)" ....
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....he part of the assessee not to disclose the full facts. However, we are not in agreement with the said argument of learned DR. As we have noted, the basic information was very much available with the AO. The onus was on the AO to further investigate. Now during the course of Appellate Proceedings, we cannot judge that how all accounts and related evidences were examined by the AO during the assessment proceedings. The only thing we can judge is that the basic information was available on record before him and on the scrutiny of the same the AO had not made any disallowance. Therefore, considering the facts of this case we can say that the possibility of forming an opinion about the expenditure claimed by the assessee could not be ruled out.....