2015 (7) TMI 1422

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....ment years in question are 1993-94, 1994-95 and 1995-96. The Tax Case Appeal Nos: 261 and 261 of 2015 are filed by the Revenue challenging the common order passed by the Tribunal allowing the appeals pertaining to the assessment years 1986-87 and 1989-90. 2. This Court admitted the T.C. (A) No: 421 of 2008 on 21.10.2008 on the following question of law : " Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal is right in law in not allowing the appellant's claim relating to the broken period interest and whether the Tribunal is right in law in merely setting aside the assessment for deciding the issue afresh after classifying the investments into permanent and current ?'' T.C.....

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....bunal ought not to have allowed the appeal in full deleting the disallowance on this account? " T.C.A. Nos: 260 and 261 of 2015 are filed by the Department raising the following substantial questions of law : " 1. Whether on the facts and in the circumstances of the case the Tribunal was right in holding that the reopening of assessment was not proper ? 2. Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that the reopening was bad even though the broken period interest was not at all considered by the assessing officer at the time of scrutiny proceedings and therefore, could not be construed as change of opinion ? 3. Is not the finding of the Tribunal bad especiall....

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....authority? 3. Whether on the facts and circumstances of the case, the Tribunal is right in law in directing the assessing authority to classify the securities into permanent and current since the appellant is holding the securities as stock-in-trade? 4. Whether on the facts and circumstances of the case, the Tribunal is right in law in confirming the assessment of the sum of Rs.10,60,63,910/- as undisclosed income? 5. Whether on the facts and circumstances of the case, the Tribunal is right in law in not considering the contention raised by the appellant that the Commissioner of Income tax (Appeals) erred in coming to the conclusion that the expenditure incurred by the appellant is bad in law, since the appellant ....

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.... 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 in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April, 1989, 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 hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words "reason to believe" but als....

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....undisclosed sources and brought to tax under the provisions of the Act. These assessment orders passed for 1991-92 to 1993-94 were taken as the basis for reopening the assessment for 1990-1991. Evidently, while rejecting the assessee's claim for 1991-92 to 1993-94, there were no fresh materials at the disposal of Revenue to take a different decision. We are pointing out this only for the purposes of showing that when the facts remained one and the same through out from the assessment years 1990-91 to 1993-94 and there were no fresh materials at the disposal of the Revenue for the assessment years 1991-92 to 1993-94, the mere fact that the Officer had taken a different view for the assessment years 1991- 92 to 1993-94, by itself would no....

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....ack of jurisdiction under Section 147 of the Income Tax Act to reopen the assessment. 21. The other issue considered for reopening was on the broken period interest. As already noted in the preceding paragraphs, the original assessment under Section 143(3) was originally made on 31.12.1990, the reopening of assessment was made based on the decision in the case of CIT vs. M/s.Vijaya Bank reported in 187 ITR 541, which was rendered on 19th September, 1990. The original assessment under Section 143(3) was made on 26.03.1993, which means the decision of the Apex Court was very much available before the Assessing Officer at the time the original assessment was made under Section 143(3) of the Income Tax Act, while he considered the clai....