TaxTMI 
TaxTMI 
2017 (11) TMI 1144
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....The learned CIT(A) has erred in law and facts of the case in upholding the reopening of the assessment u/s 147 even though the assessing officer applied mind on the issues stated in satisfaction note and this is nothing but a change of opinion which is not covered by "reason to believe" Hence learned CIT(A) erred in law and on facts of the case in not holding that the notice issued by DCIT is defective and assessment is void ab initio. 4.a That the learned CIT(A) has erred in law and facts of the case in upholding the addition of interest on line of credit which was not received and specific note on this was given in Schedule-19 which was considered by the assessing officer at the time of assessment u/s 143(3). This is change of opinion only. 4.b That the learned CIT(A) erred in upholding that the interest has accrued to the company even though, during the year, the matter was under discussion and there was no final settlement on this issue. 4.c That the learned CIT(A) has erred in law and facts of the case in not considering the fact that the amount has not been received at all even on final settlement and hence the audition made by the assessing officer is notional. 4....
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....ment u/s 143(3) and holding that this is not change of opinion. 7.b That the CIT(A)has erred in law and on facts of the case in upholding the addition to total turnover items which are not part of turnover for the purpose of computing claims u/s 80HHC. 7.c That the CIT(A)has erred in law and on facts of the case in upholding the reduction of the profit of the company by 90% of interest, vehicle hire charges and lease rentals which form pari of business in India and as eligible for benefit u/s 80HHC. 8.a That the CIT(A)has erred in law and on facts of the case in upholding the charge interest u/s 234D even though the details of the same were not given by the assessing officer. 8.b That the CIT(A)has erred in law and on facts of the case in upholding the charge interest u/s 234D even though the assessment u/s 143(3) has already been completed and hence assessment u 's 147 cannot be considered as assessment fin the first time. 8.c Without prejudice to above the CIT(A)has erred in law and on facts of the case in not considering the fact that Section 234D has been introduced w.e.f. 01.06.2003. 8.d Without prejudice to above the CIT(A)has erred in law and on facts o....
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....eceipts. Further it is noted that in the 10th year, deduction u/s 80-IA, on account of Nuclear Steam Generators (Tiruchy), amounting to Rs. 3,28,94,000/- has wrongly been considered whereas the same was being claimed u/s 80-1 in earlier 8 years. In view of above, I have reason to believe that the true income of the assessee has escaped assessment, thus, proceedings u/s 147/148 are to be taken up hereby. Sd/- Dy. COMMISSIONER OF INCOME TAX CIRCLE 2(1), NEW DELHI " Accordingly Notice u/s. 148 of the Act was issued and served upon the assessee on 04.03.2004. The assessee on 29.03.2004 submitted that original return filed may be treated in response to notice u/s 148 of the Income Tax Act, 1961. Notice u/s 143(2) of the Act was issued. During the Assessment Proceedings, the AR submitted that the assessment has been reopened after expiry of four years from the end of relevant assessment year. Since there is no failure on part of the company to disclose the facts relating to the issues (reasons for reopening), the said notice issued u/s 148 of the Act is null and void ab initio as per the Assessee. The assessee relied upon the proviso to Sec. 147 of the Act. Further the ....
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....took this view after the reopening of assessment for A.Y. 1997- 98. Therefore, the assessing officer applied his mind in this regard and this is nothing but a change of opinion which is not covered by "reason to believe" as held in case of CIT Vs. Kelvinator of India Ltd. (Delhi) 320 ITR 561 (S.C). 5.2 As relates to Ground No. 5.a to 5.d i.e. prior period expenditure, the Ld. AR submitted that as per note No. 16 of Schedule-19 of the annual accounts. During the course of assessment vide letter dated 15.02.2002 the details of prior period expenditure were given along with documentary evidence. The Ld. AR submitted that after considering all the documents and submissions, the Assessing Officer did not make any addition on account of prior period expenditure. Therefore, the Assessing Officer applied his mind in this regard and this is nothing but a change of opinion which is not covered by "reason to believe". The Ld. AR further stated that as per note no. 16 of Schedule - 19 the company credited an income of Rs. 237.71 lakhs relating to prior period and the same has also formed part of profit of the company for the purpose of computation of taxable income for the year. Further this ....
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....ear that no new facts have been brought on record after the original assessment and that the assessing officer had considered all these issues at the time of passing his order u/s 143(3) dated 15.02.2002. Therefore, this represents a change of opinion, which cannot be the basis for reopening an assessment. The Ld. AR also relied upon the Circular No.549 dated 31.10.1989. 5.4 As relates to Ground No. 7.a to 7.c i.e. deduction u/s 80HHC, the Ld. AR submitted that in addition to the items on which reopening was made the Assessing Officer also recomputed deduction u/s 80HHC by changing his opinion in respect of profit to be considered for deduction u/s 80HHC of the Act. In the reassessment order u/s 148 the assessing officer recomputed the deduction u/s 80HHC by excluding 90% of lease rental income from profit considered for computation of deduction u/s 80HHC. The rental income on leased assets shown in schedule 13B relates to locos provided to Indian Railways on lease by the company. The lease rental is a business income of the company. In the original assessment u/s 143(3), the assessing officer fully considered the facts relating to claim u/s 80HHC. In the appeal against the order ....
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....ll material facts necessary for its assessment for the relevant assessment year, void ab initio. Moreover, in the present case, as discussed hereinabove, not even an allegation as such failure has been made against the assessee company by the AO for either of the assessment years involved. Reliance by the assessee on Indian Farmers Fertilizers Coop. Ltd. (supra) is apt. Therein, it has been held that where in the reasons recorded in reopening, there was no allegation that the assessee had failed to disclose fully or truly all material facts necessary for its assessment, the AO was unjustified in taking action u/s 147/148 after the expiry of four years from end of the respective relevant assessment years. In the present case also, the Department has into been able to show, the AO to have recorded, in the reasons for reopening the assessment for both the years, any allegation that the assessee had failed to disclose fully and truly all material facts necessary for its assessment, even though both the assessments were reopened after the expiry of four years from the end of the relevant assessment years. 10. The CIT(A) has rejected the assessee's objection in this regard by observin....
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.... 143(3) was completed on 15/02/2002 at taxable income of Rs. 1084,93,70,319/-. From the satisfaction note, it can be seen that there was no new material or escapement of income indicated by the Revenue. It is only the change of opinion and there is no significant satisfaction recorded for reopening u/s 147 of the Act. If the Assessing Officer has reason to believe that any income chargeable to tax had escaped assessment for any assessment year, he may assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under Section 147 of the Act. The proviso to Section 147 of the Act clearly states that no action shall be taken under this Section after the expiry of 4 years from the end of the relevant assessment year, unless an income chargeable to tax has escaped assessment for such assessment year by reason of failure on the part of the assessee to make a return u/s 139 or in response to a notice issued under sub Section 1 to Section 142 or Section 148 or to disclose fully and truly of material facts necessary for his assessment for that Assessment Year. But in this p....