TaxTMI 
TaxTMI 
2021 (4) TMI 923
X X X X Extracts X X X X
X X X X Extracts X X X X
....ant - Revenue is as follows: The assessee - Company is engaged in the business of manufacture and sale of Tractors engineering plastic component and two wheeler batteries and trade in trailers, implements and accessories. The assessee - Company filed its return of income for the assessment year 2003-04 on 28.11.2003 declaring a total income of Rs. 32,40,89,880/-. The return was processed under Section 143(1) of the Income Tax Act, 1961 on 30.03.2004. The assessment under Section 143(3) was completed on 14.02.2006. Subsequently, the assessment was re-opened. The assessee claimed expenditure towards commission of sale, consultancy charges and others in the return of income filed for the assessment year 2003-04. While finalizing the assessm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essing Officer finalized the assessment and arrived at the revised total income at Rs. 36,20,86,590/-. Aggrieved over the assessment order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) and the Appellate Authority allowed the appeal and held that re-opening of the assessment was not valid. Aggrieved over the order passed by the CIT(Appeals), the Revenue filed an appeal before the Income Tax Appellate Tribunal and the Appellate Tribunal held that the re-opening of the assessment was done beyond four years from the relevant assessment years and as per proviso to Section 147, the reasons recorded has not shown any failure on the part of the assessee and dismissed the departmental appeal. Aggrieved over the order ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....whether the concept of "change of opinion" stands obliterated with effect from 1st April, 1989, i.e., after substitution of Section 147 of the Income Tax Act, 1961 by Direct Tax Laws (Amendment) Act, 1987? 3. To answer the above question, we need to note the changes undergone by Section 147 of the Income Tax Act, 1961 [for short, "the Act"]. Prior to Direct Tax Laws (Amendment) Act, 1987, Section 147 reads as under: "147.Income escaping assessment.- If- [a] the Income-tax Officer has reason to believe that, by reason of the omission or failure on the part of an assessee to make a return under Section 139 for any assessment year to the Income-tax Officer or to disclose fully and truly all material facts necessary for his assessment f....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Amending Act, 1989, Section 147 reads as under: "147.Income escaping assessment - If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in Sections 148 to 153 referred to as the relevant assessment year)." 4. On going through the changes, quoted above....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n, 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 hereinabove. 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 re-introduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the Assessing Officer. We quote herein below the relevant portio....