TaxTMI 
TaxTMI 
2017 (12) TMI 740
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....addition to the extent of Rs. 3,45,678 as peak amount. 2.2 The Ld. CIT(A) has grievously erred in law and or on facts in upholding the addition of Rs. 3,45,678 as unexplained purchases though the payments were duly reflected in the regular books of the appellant and the quantity was recorded in quantitative details. 2.3 That in the facts and circumstances of the case as well as in law, the Id. CIT(A) has grievously erred in upholding addition of Rs. 3,45,678. 3.1 The Id. CIT(A) has grievously erred in upholding the validity of the proceedings u/s 147 and notice u/s 148 though both were illegal, unlawful and without jurisdiction as pointed out in SOF. It is therefore prayed that the addition of Rs. 3,45,678 upheld by the CIT(A) should be deleted" 3. Briefly stated facts as culled out in the records are that the assessee is an individual engaged in trading of wheat and other items. Return of income for assessment year 2007-08 filed on 24-10- 2007 declaring income of Rs. 1,14,030/-. Case selected for scrutiny. Assessment u/s. 143(3) of the act completed on 16-11-2009 accepting the returned income as assessed income. Subsequently, notice u/s. 148 ....
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....and filed details of purchase, confirmations of sundry creditors with their names and addresses. This fact was very much before the assessing officer that assessee has made purchases of agricultural produce from various farmers. After going through all these details, Ld. Assessing officer accepted the returned income as assessed income. Thereafter, from the very same details showing confirmations of sundry creditors, ld. assessing officer observed that in some of the cases payments have been made in cash and there could be a probability of disallowance u/s. 40A(3) of the act for the payments exceeding Rs. 20,000/- in cash for the purchases. Taking these details as basis ld. assessing officer issued notice u/s. 148 of the act within four years of the completion of assessment proceedings u/s. 143(3) of the act. 8. Now, the question before us is that whether the action of the assessing officer of reopening the assessment u/s. 147 of the act within four years for "change of opinion" is valid or not? 9. We find that Hon'ble Apex Court in the case of CIT vs. Kelvinator of India Pvt. Ltd (supra) adjudicating similar issue relating to the validity of reopening of assessment u/s. 147 ....
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....on and in Sections 148 to 153 referred to as the relevant assessment year)." After the Amending Act, 1989, Section 147 reads as under: "Income escaping assessment. 147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, 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 this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year)." On going through the changes, quoted above, made to Section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, re-opening could be done under above two conditions and fulfillment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act [with effect from 1st April, 1989], t....
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.... a number of court rulings in the past and was well settled and its omission from section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended section 147 to reintroduce the expression 'has reason to believe' in place of the words 'for reasons to be recorded by him in writing, is of the opinion'. Other provisions of the new section 147, however, remain the same." For the afore-stated reasons, we see no merit in these civil appeals filed by the Department, hence, dismissed with no order as to costs." After carefully going through the judgment of apex court and examining the facts of the instant case before us, we find that the details of purchases as well as sundry creditors were provided to the assessing officer at the time of assessment proceedings u/s.143(3) of the act. Ld. assessing officer has mentioned in the body of the assessment order itself that the assessee has filed the details of purchases and sales and confirmations and the same have been gone through by him. For the purpose of reopening, there was no fresh material available wit....