2010 (3) TMI 1082

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....nce to a notice issued on 26th March, 2009 under Section 148 of the Income Tax Act, 1961. 3) In the present case, an assessment order was passed on 29th December, 2006 under Section 143(3). In support of the notice for reopening of the assessment, the Assessing Officer furnished three reasons. These reasons are as follows:- A. Expenditure of Rs. 95,917,040 being capital in nature has been debited to the profit and loss account. Out of the same the assessee has added back in the computation of income only an amount of Rs,18,911,628 thereby leading to escapement of income amounting to Rs. 77,005,412/-. B. The liability of Rs. 145,413,619 being liability on returnable containers is merely a provision and not allowable as an expenditur....

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....ed by the assessee and to deal with them in the order disposing of the objections. In view of the judgment of the Supreme Court in Commissioner of Income Tax V/s. Kelvinator of India Ltd. [2010] 320 ITR 561 (SC) , it is now a settled position of law that even when the Assessing Officer exercises jurisdiction to reopen the assessment within a period of four years of the expiry of the relevant assessment year, he cannot do so on a mere change of opinion and in the absence of tangible material. The Supreme Court has held thus:- "...Therefore, post-1st April, 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....

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....nly on the basis of a mere change of opinion. The Assessing Officer, having failed to do so, we are of the view that it would be fit and proper to set aside the impugned order dated 14th December, 2009 disposing of the objections of the assessee and to remand the proceedings back to the Assessing Officer to pass a fresh order on the objections filed by the assessee to the reopening of assessment. In dealing with the objections, the Assessing Officer shall have due regard to the principles of law laid down by the Supreme Court in the case of Kelvinator of India (supra). As noted earlier, it has been observed by the Supreme Court that there must be tangible material before the Assessing Officer when he seeks to reopen the assessment. 8) In....