TaxTMI 
TaxTMI 
2020 (1) TMI 494
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....ng that the tax effect entailed is less than the monetary limit specified in para 3 of circular no.3/20 18 or there is no tax effect. Para 10 (C) where Revenue Audit Objection in the case has been accepted by the department." 4. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing Officer restored. 3. The brief facts of the case are as under: The Respondent-assessee is an individual carrying on the business in the name and style of M/s. V.M. Venkatesa Mudaliar & Sons is engaged in purchase and sale of lungies. The return of income for the AY 2011-12 was filed on 24.02.2012 disclosing total income of Rs. 1,81,490/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-3, Vellore, (hereinafter called "AO") vide order dated 31.03.2013 passed u/s. 143(3) of the Income Tax Act, 1961 (in short 'the Act') at total income of Rs. 2,75,190/-. Subsequently, the Assessing Officer formed an opinion that income got escaped assessment to tax. Accordingly, initiated reassessment proceedings by issue of notice u/s.148 of the Act on 28.03.20....
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....come u/s.139 of the Act or failed to respond to notice issued u/s.142 of the Act. The fact that in the original assessment order, the Assessing Officer made some additions suggests that assessee had filed all requisite details required to complete the assessment. For the purpose of assumption of jurisdiction u/s.147 of the Act, the Assessing Officer should have reasons to believe that income escaped assessment based on some tangible new materials. From the perusal of the assessment order, it is clear that the Assessing Officer had not made reference to any tangible material nor which has come to his notice after completion of original assessment which enable the Assessing Officer to form an opinion that income escaped assessment. Therefore, it can be safely concluded that reassessment proceedings was initiated based on materials already available on record. It is a case of mere change of opinion on the same set of information/material. The other requisite condition to be satisfied in case where the reopening is sought after expiry of four years from the end of the relevant assessment year is that there should be failure on the part of the assessee to disclose all material facts whi....
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....ision of the Full Bench of the Delhi High Court in the case of Commissioner of Income Tax V. Kelvinator of India Ltd. reported in [2002] 256 ITR 1 (Del), wherein, the Delhi High Court held as follows: We also cannot accept the submission of Mr. Jolly to the effect that only because in the assessment order, detailed reasons have not been recorded an analysis of the materials on the record by itself may justify the Assessing Officer to initiate a proceeding under section 147 of the Act. The said submission is fallacious. An order of assessment can be passed either in terms of sub-section (1) of section 143 or sub-section (3) of section 143. When a regular order of assessment is passed in terms of the said sub-section (3) of section 143 a presumption can be raised that such an order has been passed on application of mind. It is well known that a presumption can also be raised to the effect that in terms of clause (e) of section 114 of the Indian Evidence Act judicial and official acts have been regularly performed. If it be held that an order which has been passed purportedly without application of mind would itself confer jurisdiction upon the Assessing Officer to reopen the procee....
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....89, 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 herein above. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words " reason to believe" but also inserted the word " opinion" in section 147 of the Act. However, on receipt of representations from the companies against omission of the words " reason to believe", Parliament reintroduced the said expression and deleted the word " opinion" on the ground that it would vest arbitrary powers in the Assessing Officer. We quote hereinbelow the relevant portion of Circular No. 549 dated October 31, 1989 ([1990] 182 ITR (St.) 1,29), which reads as follows : "7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression ' reason to believe' in section 147. A number of representations were received against the omission of the words ' reason to believe' from section 147 and their substitution by the ' opinion' of the A....
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....he end of the relevant assessment year is the belief reasonably entertained by the Assessing Officer that any income chargeable to tax has escaped assessment for that assessment year. However,when the power is invoked after the expiry of the period of four years from the end of the assessment year, a further pre-condition for such exercise is imposed by the proviso namely, that there has been a failure on the part of the assessee to make a return under section 139 or in response to a notice issued under section 142 or section 148 or failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year. Unless, the condition in the proviso is satisfied, the Assessing Officer does not acquire jurisdiction to initiate any proceeding under section 147 of the Act after the expiry of four years from the end of the assessment year. Thus, in cases where the initiation of the proceedings is beyond the period of four years from the end of the assessment year, the Assessing Officer must necessarily record not only his reasonable belief that income has escaped assessment but also the default or failure committed by the assessee....
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....s such failure on the part of the assessee would be indicative of a failure on the part of the Assessing Officer to apply his mind to material facts, and on that ground also the notice issued would be vitiated. The reasons actually recorded and as set out by the officer in the counter affidavit are such that even after close scrutiny they do not establish even prima facie a failure on the part of the assessee to fully and truly disclose the material facts for the assessment. ......... The duty of an assessee is limited to fully and truly disclosing all the material facts. The assessee is not required thereafter to prepare a draft assessment order. If the details placed by the assessee before the Assessing Officer were in conformity with the requirements of all applicable laws and known accounting principles, and material details had been exhibited before the Assessing Officer, it is for the Assessing Officer to reach such conclusions as he considered was warranted from such data and any failure on his part to do so cannot be regarded as the assessee s failure to furnish the material facts truly and fully. Any lack of comprehension on the part of the Assessing Officer in und....