TaxTMI 
TaxTMI 
2015 (9) TMI 1625
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....nder section 143(1) of the Act was issued to the assessee as on 23.7.2012. Thereafter, the Assessing Officer issued a notice under section 148 of the Act dated 14.6.2013 to reopen the case after recording reasons for reopening, copy of which was placed on record at pages 1 to 3 of the Paper Book filed by the assessee. 3. The view of the Assessing Officer was that for the initial five assessment years i.e. 2006-07 to 2010-11, the assessee was allowed deduction under section 80-IC of the Act to the extent of 100% of eligible profits. However, for the current assessment year i.e. 2011-12 being 6th year of the assessee's business activities, it was eligible to get deduction under section 80-IC of the Act @ 25% instead of 100% as claimed by the assessee. The assessee made detailed submissions before the Assessing Officer contending that since it has done substantial expansion during the year it is eligible for deduction under section 80-IC of the Act @ 100% even in this year. However, the Assessing Officer did not find himself in agreement with the contention of the assessee and allowed it the deduction under section 80-IC of the Act @ 25% instead of 100% claimed by it. In this w....
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....to the case of the assessee. Further, on the issue of reopening under section 147 of the Act, she held that the initial requirement for reopening the case under section 147 of the Act is that there must be information for reopening. The information may come from external sources or even from materials already on the record or may be derived from the discovery of new and important matter or fresh facts, as held in Kalyanji Mavji & Co. v. CIT [1976] 102 ITR 287 (SC). Further, she held that the reliance placed by the assessee in the case of SPL's Sidhartha Ltd. (supra) and Orient Craft Ltd. (supra) are not from Jurisdictional High Courts, therefore, are not applicable to the case of the assessee. In this way, she dismissed the appeal of the assessee upholding the reopening under section 147 of the Act and confirmed the addition made by the Assessing Officer. 6. Aggrieved by the order of the learned CIT (Appeals), the assessee has come up in appeal before us raising the following grounds of appeal : "1. That the Learned CIT(A) is not justified in not allowing the 100% deduction by not accepting the year of 'substantial expansion' as 'initial year' thus n....
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....on'ble Delhi High Court in the case of Orient Craft Ltd. (supra) and also SPL's Siddhartha Ltd. (supra). Further, during the course of hearing, an order of the ITAT, Mumbai Bench in the case of Delta Air Lines, Inc v. ITO in ITA No.3476/Mum/2008 dated 30.11.2012 was also placed on record. By the help of this order, he submitted that even in cases originally done under section 143(1) of the Act, no reopening under section 147 of the Act can be made by the Assessing Officer without there being any tangible material coming into his possession. In this case, reliance was placed on a Third Member decision of the ITAT, Mumbai Bench in the case of Telco Dadajee Dhackjee Ltd. v. Dy. CIT in ITA No. 4613/Mum/2005 dated 12.5.2010 to contend that in the absence of any such new material, reopening of an assessment itself was bad in law and assessment made in pursuance thereof is liable to be cancelled being invalid. Reliance was also placed on the judgment of the Hon'ble Apex Court in the case of CIT v. Kelvinator of India Ltd., [2010] 320 ITR 561. 8. The learned D.R. during the course of hearing submitted that the issue on merits is covered against the assessee by the orde....
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....ssistant Commission of Income-tax [1971] 82 ITR 147, in following words : 'The words "reason to believe" suggest that the belief must be of an honest and reasonable person based upon reasonable grounds and that the Income Tax Officer may act on direct or circumstantial evidence but not on mere suspicion, gossip or rumour.' 12. This proposition has been affirmed by a catena of decisions by the Hon'ble Supreme Court both prior to it and also later on, in different words. 13. There can be no dispute that the main ingredients for initiating these provisions are presence of material and live link between the material and the belief formed by the Assessing Officer, which makes the 'reasonable belief' as propounded in the provisions itself. Coming to the "reason to believe", we may be guided by another judgment of the Hon'ble Apex Court in the case of Kelvinator of India Ltd. (supra). The case was rendered surely in the context of original assessment having been made under section 143(3) of the Act however, the interpretation made was that of the phrase 'reason to believe', which is applicable equally to the cases made under section 143(1)(a)....
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....n the case of Rajesh Jhaveri Stock Brokers (P.) Ltd. (supra) and Kelvinator of India Ltd. (supra) to our humble opinion, infers that though in case of section 143(1)(a) of the Act, any argument of it being illegal because of change of opinion is not sustainable, however, there has to be some tangible material in possession of the Assessing Officer to reopen such cases. In the present case, the assessee filed return under section 139(1) as on 30.7.2011, intimation under section 143(1)(a) of the Act was issued as on 23.7.2012 and the notice under section 148 of the Act was issued as on 14.6.2013. What came into his possession between these two dates, which triggers him to form a belief. The copy of reason as reproduced by the Assessing Officer, also filed by the assessee in his Paper Book, does not reveal any such material coming into his possession. Even the order of the Delhi Bench of the ITAT in the case of Tirupati LPG Industries Ltd. (supra) was also rendered after the recording of reasons by the Assessing Officer, which is otherwise also in assessee's favour. 18. The reliance placed in this context, by the learned counsel for the assessee on the order of the Third Member....