AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (6) TMI 612
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....facturing pharmaceutical machineries. It filed original return of income for A.Y. 20132014 on 28.9.2013 declaring total income of Rs. () 2,06,48,540/which was initially processed under section 143(1) of the Act. During the year under consideration, the petitioner had written off bad debts aggregating to Rs. 3,47,24,110/which also included a sum of Rs. 3,00,73,657/recoverable from a foreign party namely, "Govt. Pharmaceutical Organization, Thailand". This fact was stated by "Note No. 23Exceptional items" forming part of the audited annual accounts. The said note also contained disclosure that with regard to Rs. 3,00,73,657/written off which is due from a foreign customer, approval of Reserve Bank of India is awaited. 4.2 The case of the petitioner was selected for scrutiny assessment and various details and information were called for. The petitioner by letter dated 16.9.2014 furnished the information such as, acknowledgment of income tax return along with computation of return of income, audited annual accounts and tax audit report. 4.3 The Assessing Officer issued notice dated 3.8.2015 under section 142(1) of the Act and called upon the petitioner to furnish various details ....
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....hed. The petitioner also submitted that bank advices, retails, invoices (original and revised), packing list in respect of each invoice and shipping bills for export with respect to such exports in order to prove the genuineness of such transactions. 4.7 The Assessing Officer passed the assessment order dated 30.11.2015 under section 143(3) of the Act after considering the details furnished and averments made by the petitioner and did not disturb the claim of bad debts written off during the year under consideration. 4.8 Thereafter, the respondent issued the impugned notice dated 28.3.2018 under section 148 of the Act seeking to reopen the assessment of the petitioner for A.Y. 20132014. In response thereof, the petitioner furnished return of income on 21.4.2018 and vide letter dated 10.5.2018, the respondent supplied the copies of reasons recorded for reopening. 4.9 On perusal of the reasons for reopening, it is revealed that reopening is made as the petitioner did not obtain permission of RBI for writing off of foreign receivables as bad debts as claim of such bad debts cannot be allowed without permission of RBI to write it off as per circular No.88 dated 12.3.2013 issue....
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....t was submitted that such belief must lead to a conclusion that income has escaped assessment. Learned advocate for the petitioner after referring to the details submitted during the course of regular assessment contended that the Assessing Officer at the time of original assessment after minutely examining the claim of bad debts written off during the year under consideration consciously, chose not to disturb the claim of bad debts written off by the petitioner while framing the assessment under section 143(3) of the Act. 7. Learned advocate for the petitioner submitted that there is no new information or fresh evidence which has come into possession of the respondent which was not there when original assessment was framed inasmuch as the respondent has merely relied upon the contents of the financials of the petitioner for the purpose of reopening and as such reopening is based on reappreciation of evidence which was already furnished at the time of original assessment proceedings. It was therefore, submitted that the respondent cannot take any action under section 147 of the Act, merely because he happens to have different opinion from that of his predecessor on the same set o....
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....ission of RBI for bad debts written off of foreign export receivable. It was submitted that as mandated by Reserve Bank of India under circular No.88, necessary permission upon fulfilling certain conditions is absent in the present case. Moreover, though the Assessing Officer under notice dated 14.10.2015 had requested the assessee to furnish various details including details of ledger of person against whom bad debts were written off and the permission for writing off the bad debts from RBI, the petitioner failed to provide such permission. It was therefore, submitted that the impugned notice was issued after following due procedure as there was reasonable belief that income has escaped assessment inasmuch as at this stage, sufficiency of reasons is not required to be gone into. It was therefore, submitted that the petition be dismissed as the impugned notice is legal and a valid notice. 10. The petitioner has challenged the notice for reopening for A.Y. 20132014 within a period of four years from the end of relevant assessment year. On perusal of the reasons recorded by the respondent, it is revealed that the reason to believe has been formed as income chargeable to tax has bee....
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....ive a schematic interpretation to the words "reason to believe" falling which section 147 would give arbitrary powers to the Assessing Officer to reopen assessments on the basis of 'mere change of opinion' which cannot be per se reason to reopen. One must also keep in mind the conceptual difference between power to review and power to reassess. The Assessing Officer has no power to review; he has the power to reassess, but the reassessment has to be based on fulfillment of certain preconditions 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 inbuilt test to check abuse of power by the Assessing Officer. Hence after 141989, the Assessing Officer has power to reopen, provided there is tangible material to come to conclusion that there is escapement of income from assessment." 13. In the facts of this case, the respondent has formed a second opinion on the same material and has issued the impugned notice merely on the ground that on second thought a different view is possible. Such facts ....