TaxTMI 
TaxTMI 
1998 (12) TMI 51
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the issuance of notice, inter alia, on the grounds that the reasons show that the impugned notice proceeds on mere change of opinion on reappreciation of evidence which is already on record. In respect of the Marine Division, the assessee has not claimed export benefit under section 80HHC of the Act, the erroneous calculation of which is considered to be the ground for reopening the completed assessment. Recourse to section 148 is not permissible to reopen a concluded assessment merely because the authority takes a different view on the same facts which were already on record, and considered. Another contention which the petitioner raised is that the assessment has been re opened on the basis of the remarks of the Accountant General (Audit Wing). The remark of the Accountant-General cannot be regarded as information enabling the respondent to reopen the assessment in relation to the audit objection. It was further alleged that on receipt of a query from the audit wing of the Comptroller and Auditor-General, the respondent called upon the petitioner to explain the stand of the petitioner from time to time. The matter rested there for some time and therefore the petitioner believed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....with the audit wing was for my seeking absolute clarity on the vexed issue and is not directly relevant to the matter and in any case does not detract from the fact that I had the necessary reason to believe that income had escaped assessment at the time of issuance of the notice." In the affidavit of Mr. M. H. Pandav, while it was admitted that there was correspondence between his office and the office of the audit wing and in the earlier correspondence he had put forward a possible point of view before the audit wing of the Department for clarity and asserted that at the time of issuing the notice he had arrived at the necessary independent satisfaction on receiving information about non-disclosure of turnover from the audit Department, he has kept silence about the averments made in the petition about again sticking to his earlier view about the non-maintainability of the audit objection vide a letter on or about March 19, 1997. Absence of any denial about the later correspondence still asserting the correctness of earlier assessment prompted us to go through the record ofthe proceedings for initiation of action under section 148. It revealed that, in the first instance, the co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ereafter, on February 18, 1997, notices have been issued. The proceedings before issuance of notice go to show that first a note has been submitted about there being approval of the action by the Commissioner of Income-tax, as intimated by the Deputy Commissioner of Income-tax (Audit) vide his letter dated August 29, 1996, and notice under section 148 issued on February 18, 1997. The note was put up for signature and thereafter the aforesaid reasons have been recorded. On February 18, 1997, this happens and on March 17, 1997, the very officer writes to the Commissioner of Income-tax which is supposed to be in continuation of the earlier report dated March 4, 1996, along with copy of his report. It is a longish document of about eight pages. The final conclusion recorded by the concerned officer in the last para of the report reads : "Considering the aforesaid analysis and effect of circular and considering the fact that divisions are separate and independent and there is no interlacing of finance and management and further taking into consideration the law pronounced by the Supreme Court in CIT v. Canara Workshops P. Ltd. [1986] 161 ITR 320, the claim put in by the assessee-compa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... cannot, for the purpose of such belief, add to or colour the significance of such law. The true evaluation of the law in its bearing on the assessment must be made directly and solely by the Income-tax Officer." The ratio fully governs the present case and the record illuminates the failure of the Assessing Officer to adhere to this principle while issuing notice under section 148 in the present case. It is true that satisfaction of the Assessing Officer for the purpose of reopening is subjective in character and the scope of judicial review is limited. When the reasons recorded show a nexus between the formation of belief and the escapement of income, a further enquiry about the adequacy or sufficiency of the material to reach such belief is not open to be scrutinised. However, it is always open to question the existence of such belief on the ground that what has been stated is not the correct state of affairs existing on record. Undoubtedly, in the face of the record, the burden lies, and heavily lies, on the petitioner who challenges it. If the petitioner is able to demonstrate that in fact the Assessing Officer did not have any reason to believe or did not hold such belief i....