TaxTMI 
TaxTMI 
2018 (10) TMI 73
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....The petitioner had made tax and full disclosure of its amounts. The petitioners underwent a scrutiny assessment under Section 143(3) of the Act of 1961 in respect of financial year concerned. The twin grounds cited in the reasons for invoking Section 148 of the Act of 1961, are not available to the department. He has referred to the first ground being the alleged incorrect claim of depreciation while computing book profit under Section 115JB of the Act of 1961, and has submitted that, on such score, all material facts were in possession of the Assessing Officer during the scrutiny assessment. The Assessing Officer had dealt with such aspect in the order passed under Section 143(3) of the Act of 1961 on December 24, 2009. The Assessing Officer had formed an opinion on the basis of the materials placed before him while computing the assessment. The Assessing Officer is not entitled to change his opinion on the basis of existing facts to reopen the assessment under Section 147 and 148 of the Act of 1961. He has relied upon 2012 Volume 344 Income Tax Report page 187 (Amrit Feeds Limited v. Assistant Commissioner of Income Tax & Ors.), 2002 Volume 256 Income Tax Report page 1 (Commissio....
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....making full and true disclosure even when undergoing the scrutiny assessment. An Assessing Officer is entitled to invoke the jurisdiction under Section 147 of the Act of 1961 when, the assessee is guilty of not making full and true disclosure of the accounts and where, income escaped assessment and the Assessing Officer has reasons to believe it to be so. She has relied upon 2009 Volume 226 Commercial Tax Report page 659 (EMA India Ltd. v. Assistant Commissioner of Income-tax), 2001 Volume 247 Income Tax Report page 818 (ESS ESS KAY Engineering Co. P. Ltd. v. Commissioner of Income Tax), 2007 Volume 291 Income Tax Report page 500 (Assistant Commissioner of Income-Tax v. Rajesh Jhaveri Stock Brokers (P.) Ltd.), 1991 Volume 2 Supreme Court Cases page 558 (A.L.A. Firm v. Commissioner of Income Tax, Madras) and 2006 Volume 281 Income Tax Report page 394 (Consolidated Photo and Finvest Ltd. v. Assistant Commissioner of Income-Tax) in support of her contentions. The petitioner is a company incorporated under the Companies Act, 1956. It is an assessee under the Act of 1961. The petitioner filed its return of Income for the Assessment Year 2007-08 on October 28, 2007 electronically disc....
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....he respondents that, there are tangible materials before the Assessing Officer to come to the conclusion that there was escapement of income from assessment. Kelvinator of India Ltd. (supra), has considered whether the concept of change of opinion stands obliterated with effect from April 1, 1989 after substitution of Section 147 of the Act of 1961 by the Direct Tax Laws (Amendment) Act 1987. It has answered such question as follows:- "6. On going through the changes, quoted above, made to section 147 of the Act, we find that, prior to the Direct Tax Laws (Amendment) Act, 1987, reopening could be done under the above two conditions and fulfilment 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), they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post-1st April, 1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we....
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.... 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." Rajesh Jhaveri Stock Brokers (P.) Ltd. (supra) has held that, Section 147 authorises and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. It has explained the word "reason" in the phrase "reasons to believe" to mean cause for justification. It has held that, if the Assessing Officer has caused for justification to know or suppose that income has escaped assessment, if can be said to have reasons to believe that, an income has escaped final assessment. An Assessing Officer need not ascertain the fact of income escaping assessment finally by legal evidence. It has held that, under the substituted Section 147 of the Act of 1961, if the Assessing Officer, for whatever reason, has reasons to believe that, income has escaped assessment, it confers jurisdiction to reopen the assessment if it does not fall within the pr....
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....explanation to Section 147 since the same could have been discovered by the Assessing Officer only with due diligence. Apollo Tyres Ltd. (supra) has held that, while determining the book profits under Section 115J, the Assessing Officer cannot recompute the profits in the profit and loss account by excluding the provisions made for arrears of depreciation. Section 147 is one of the statutory instruments available to the Assessing Officer to arrest, income chargeable to tax which has escaped assessment, for any assessment year. The statutory instrument, however, is with prescribed limitations. There are two parts to Section 147 of the Act of 1961. One part relates to the Assessing Officer invoking such provisions when a period less than four years has elapsed from the end of the relevant assessment year. During such period of time, if the Assessing Officer, is inclined to invoke Section 147 of the Act of 1961, he has to have reasons to believe that, income chargeable to tax has escaped assessment. He must have tangible material to come to the conclusion that, income has escaped assessment. There has to be a livelink. The other portion of Section 147 deals with a situation where a....