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2021 (5) TMI 828
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....ssment was completed by order dated 28.01.2013 determining the total income at Rs. 12,28,80,67,890/-. Subsequently, the AO had issued notice u/s. 148 dt: 30.03.2017. In response to the said notice, Appellant had filed return of income on 29.04.2017 declaring income of Rs. 7,81,51,68,997/-. 2.1. After filing the return in response to notice u/s. 148, assessee requested for reasons for reopening the assessment which were communicated to the assessee by AO's letter dated 22.12.2017. Reason for reopening the assessment is stated to be as under: "As per the Schedule 8 in respect of investment an amount of Rs. 25,10,37,000/-was actually decreased from total investment as Depreciation on Investment. It was also seen from the Para 10.2 of schedule 18-Notes on a/c that the same figure was taken as depreciation on Investment. An amount of Rs. 3,85,78,19,885/- was claimed as deduction as per revised computation of income sheet. It is pertinent to mention here that the CBDT circular No. 1712008 dt. 26.11.2008 states that the actual deduction made in the books of e/c shall only be debited in r/o. any provision u/s. 36(vii) & 36(vii-a). On the same line, as the actual debited amo....
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....tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year." Therefore as could be seen from the above proviso where an assessment was already completed u/s. 143(3) such assessment cannot be reopened after the expiry of four years from the end of the relevant assessment year in which the assessment was completed. Therefore in our case, since our assessment was completed u/s. 143(3) on 28.01.2013 the same cannot be reopened after four years of the relevant assessment year i.e., the assessment cannot be reopened beyond 31.03.2015 unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee in disclosing fully and truly all material facts necessary for completion of assessment for that assessment year. In view of the above we submit that since the notice u/s. 148 was issued on 30.03.2017 which is after four years of relevant a....
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....ssessment is completed and therefore reopening of assessment is only due to mere change of opinion and that too beyond the time limit as specified in the proviso to section 147 of the Act which is bad in law. We rely on the following cases for the proposition that "assessment cannot be reopened U/s. 147 of the Act on change of opinion of the Assessing Officer when the assessee has already disclosed all the information necessary for completion of original assessment". 1) CIT Vs. Bhavji Lavji [79 ITR 582 (SC)] 2) CIT Vs. Kelvinator of India Ltd. [256 ITR 1 (Delhi)(FB)] 3) JCIT Vs. George Williamson (Assam) Ltd.[ 258 ITR 126 (Gauhati)] 4) CIT Vs. Rajasthan Patrika Ltd. [258 ITR 300 (Raj)] 5) Jindal Photo Films Ltd. Vs. DCIT [234 ITR 170 (Delhi)] 6) Garden Silk Mills (P) Ltd. Vs. DCIT [237 ITR 668 (Guj)] 7) General Mrigendra Shum Sher Jung Bahadur Rana Vs. ITO [123 ITR 329, 335 (Delhi)] We therefore submit that since all details regarding depreciation on investments are available on record to the then Assessing Officer, there is no occasion for reopening our assessment for the assessment year 2010-11 beyon....
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..... 3,60,67,82,885/- by remitting back the issue to the learned Assessing Officer to re-work the depreciation allowance by considering earlier years opening stock and closing balances. 3.1. The learned Commissioner of Income Tax (Appeals) failed to appreciate the fact that the investments of the appellant Bank are stock in trade and the appellant Bank is eligible to claim the loss arising out of the valuation of the stock at cost or market value whichever is lower. 3.2. The learned Commissioner of Income Tax (Appeals) erred in not allowing the depreciation after taxing the entire income under the head Business or Profession. 3.3. The learned Commissioner of Income Tax (Appeals) failed to appreciate the fact that once an income is taxed under the head Business 1 Profession, then the closing stock should be considered as stock in trade and the valuation loss arising by valuing the same at lower of cost or market value is an allowable deduction. 3.4. The learned Commissioner of Income Tax (Appeals) erred in not following the decision of the Hon'ble Tribunal in the case of Appellant Bank's own case. 3.5. The learned Commissioner of Inc....
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....on and such diminution in their value during the year is arrived at Rs. 3,85,78,19,885/-. 8. The ld. DR, on the other hand, contended that Commissioner(Appeals) erred in directing the A.O. to re-workout the disallowance of depreciation on investments Rs. 3,60,67,82,855/- wrt 'HTM' category securities without verifying from the records of bank the purpose for which they were purchased by bank initially to determine nature of securities whether they are in nature of stock in trade or Investments. 9. We have considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. It is a settled position of law that the assessment can be reopened under section 147/148 on the basis of 'reason to believe' and not 'reason to suspect'. Unless the reasons to believe about the escapement of income exist, no recourse can be taken to the provisions of section 147. An Assessing Officer ventures to initiate reassessment proceedings with an object of finding some material about the escapement of income, such reassessment cannot legally stand and the law does not permit the Assessing Officer to conduct inquiries a....
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.... action was initiated within the four year time limit, it was found that it was based on mere change of opinion and reassessment proceedings was, therefore, not justified. (2) In Consolidated and Fin vest Limited Vs. Asst. Commissioner of Income Tax, (2006) 281 ITR 394 (Delhi), the High Court held that the doctrine of change of opinion could not be a basis for reopening completed assessments and would be applicable only to situations where the Assessing Officer had applied his mind (in earlier assessment) and taken conscious decision on a particular matter in issue, and it would have no application, where the order of assessment did not address itself to the aspect which was the basis for re-opening of the assessment. The High Court further held that mere production of books of account or other evidence from which the Assessing Officer could have, with due diligence, discovered the material evidence does not necessarily amount to a disclosure within the meaning of the proviso to Section 147 of the Act. (3) In Jai Hotels Co. Limited Vs. Asst. DIT, (2009) 24 DTR 37 (Del), the Delhi High Court has held that there being no new material in the hands of the Revenue lead....
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.... the entire material had been placed by the assessee before the Assessing Officer at the time when the original assessment was made and the Assessing Officer applied his mind to that material and accepted the view canvassed by the assessee, then merely because he did not express this in the assessment order, that by itself would not give him a ground to conclude that income had escaped assessment and, therefore, the assessment needed to be reopened. The assessee had no control over the way an assessment order is drafted. (6) In Commissioner of Income Tax Vs. Kelvinator of India Limited, (2010) 320 ITR 561, the Supreme Court observed that post 01-04-1989, the power to reopen is much wider. However, one needs to give a schematic interpretation to the words 'reason to believe' failing which, Section 147 would give arbitrary powers to the Assessing Officer to reopen the assessments on the basis of 'mere change of opinion' which cannot be per se reason to reopen. The conceptual difference between the power to review and power to reassess is to be kept in mind. The Assessing Officer has no power to review; he has the power to reassess. But reassessment has to be ....