TaxTMI 
TaxTMI 
2011 (6) TMI 957
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....T(Appeals), Shimla was not justified in upholding the orders of the Ld.A.O. Whereas the Ld. A.O. has erred in issuing notice u/s 148 of the Income-tax Act, 1961 since no new facts have come to the knowledge of the Ld. A.O. and opening of the case is merely on difference of opinion. 3. That the income of Rs. 5,00,000/- on account of income from growing of Mushrooms has been wrongly treated as business income." 3. The first issue raised by the assessee is against the invoking of jurisdiction under section 147/148 of the Income-tax Act. 4. The brief facts of the case are that the assessee had filed return of income declaring agricultural income of Rs. 5 lacs. The said case was picked up for scrutiny. The Assessing Officer ....
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....sment and treating the income from agriculture as income from business. 5. Shri Neeraj Sharma, appeared on behalf of the assessee and Smt.Jaishree Sharma appeared on behalf of the Revenue and put-forth their contentions. 6. We have heard the rival contentions and perused the record. The first issue raised in the present appeal is against the invoking of provisions of section 147/148 of the Income-tax Act. The original assessment in the case was completed under section 143 (3) of the Act vide order dated 31.3.2005. The copy of the assessment order passed under section 143 (3) of the Act is available on record. The only income declared in the said return of income was the agricultural income on sale of mushrooms declared at Rs. 5 lacs. ....
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....the expiry of four years from the end of the relevant assessment year, in cases where assessment is completed under section 143 (3) of the Act. Admittedly, the proceedings under section 147 of the Act, in the present case, have been initiated within a period of four years. The issue to be adjudicated in the present case is whether the provisions of section 147 of the Income-tax Act can be invoked in the present set of facts and circumstances. 9. The Hon'ble Supreme Court in Raymond Woolen Mills Vs. ITO [(1999) 236 ITR 34 (SC)] held that "what is required to be seen in a case such as this is whether prima facie there was some material before the Assessing Officer on the basis of which he could reopen the case of the assessee. The suff....
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....and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April, 1989, the Assessing Officer has power to reopen, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to section 147 of the Act, as quoted hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words "reason to believe" but also....
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....Direct Tax Laws Amendment Act, 1987 w.e.f. Ist April, 1989, power to reopen was much wider but the section 147 does not give arbitrary power to the Assessing Officer to reopen the assessment on mere 'change of opinion'. The Hon'ble Supreme Court further held that there was conceptual difference between 'power to review' and 'power to reassess'. It was thus held "the Assessing Officer has no power to review; he has the power to reassess but reassessment has to be based on fulfillment of certain pre conditions .........." The Hon'ble Supreme Court concluded by holding that the Assessing Officer has power to reopen, provided there is 'tangible material to come to the conclusion that there was escapement of income from assessment.' 1....
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....of the Act is not warranted on mere change of opinion as held by the Hon'ble Supreme Court in the case of Raymond Woolen Mills vs. ITO (supra) and CIT vs. Kelvinator of India Ltd. (SC). The power enshrined under section 147 of the Act cannot be invoked in order to review the earlier assessment order passed in the case. We find that in the original assessment proceedings completed under section 143 (3) of the Act vide assessment order dated 31.3.2005, the only source of income declared by the assessee was the agricultural income of Rs. 5 lacs from mushrooms. The issue was considered by the Assessing Officer and the agricultural income as shown by the assessee at Rs. 5 lacs was taken for rate purposes, in addition to the income from other....