TaxTMI 
TaxTMI 
2014 (1) TMI 1928
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....Rs. 1,19,44,210/- by making certain adjustments, in the return of wealth originally filed on 31-01-2003. Thereafter, the AO noted that on 07-01-2009 Sri B. Ramalinga Raju, the then Chairman of M/s Satyam Computer Services Ltd. confessed to having fudged the accounts of the company over the last several years. He further stated that the revenues and profits were manipulated by falsification of accounts for the last several years. Sworn statement of Shri B. Ramalinga Raju was recorded on 21-02-2009 in Central Prison, wherein he confirmed and reiterated his confession. Based on the information gathered, AO had reasons to believe that wealth chargeable to tax had escaped assessment. Accordingly, notice u/s 17 of the W.T. Act dated 26-03-2009 was issued which was served on Assessee on 28-03-2009. Assessee filed a return on 11-05-2009 in response to notice u/s 17 admitting the taxable wealth at Rs. 1,11,32,600/- as was admitted in the original return of wealth. 3.1 During the course of assessment proceedings, a reference was made to Sub-Registrar's offices holding jurisdiction on the assets owned by Sri B. Ramalinga Raju and his family members as well as various entities connected wit....
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....ssment beyond four years from the end of the assessment year in question was bad in law as there was no omission on the part of the appellant to disclose all material facts and in furnishing necessary information for completion of the assessment and therefore the CWT(A) ought to have annulled the assessment passed u/s 16(3) read with section 17 of the Wealth Tax Act, 1957. 3. The learned CWT(A) failed to note that there was no nexus between the reasons recorded for reopening of wealth tax assessment and the addition of Rs. 13,19,300 and Rs. 43,26,375/-. 4. The learned CWT(A) failed to note that there was no real and substantial nexus between the wealth assessed at Rs. 1,75,89,900/- and the addition made and therefore the CWT(A) ought to have held that the aforesaid amount were not includible in the net wealth of the appellant. 5. Without prejudice to any of the aforesaid grounds the learned CWT(A) having regard to the provisions of section 2(ea) of Wealth Tax Act, 1957 ought to have clearly held that the sum of Rs. 13,19,300/- was not an asset belonging to the appellant within the meaning of the aforesaid section. 6. The learned CWT(A) failed to ....
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.... allowed as such. Therefore, there are no reasons to take a different view in reassessment proceedings. There is no information also. This comes within the purview of change of opinion. For the concept of change of opinion, the Supreme Court has held in the case of CIT vs. Kelvinator of India Ltd. (2010) 320 ITR 561 as follows : "The concept of "change of opinion" on the part of the Assessing Officer to reopen an assessment does not stand obliterated after the substitution of section 147 of the Income Tax Act, 1961, by the Direct Tax Laws (Amendment) Acts, 1987 and 1989. After the amendment, the Assessing Officer has to have reason to believe that income has escaped assessment, but this does not imply that the Assessing Officer can reopen an assessment on mere change of opinion. The concept of "change of opinion" must be treated as an in-built test to check the abuse of power. Hence, after April 1, 1989, the Assessing Officer has power to reopen an assessment, provided there is "tangible material" to come to the conclusion that there was escapement of income from assessment. Reason must have a link with the formation of the belief. Decisions of the Delhi High Court in Cit v. Kel....
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....he belief. Our view gets support from the changes made to s. 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 s. 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 AO. We quote hereinbelow the relevant portion of Circular No. 549, dt. 31st Oct., 1989 [(1990) 82 CTR (St) 1], which reads as follows : "7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression 'reason to believe' in s. 147. A number of representations were received against the omission of the words 'reason to believe' from s. 147 and their substitution by the 'opinion' of the AO. It was pointed out that the meaning of the expression, 'reason to believe' had been explained in a number of Court rulings in the past and was well settled and its omission from s. 147 would give arbitrary powers to the AO to reopen past assessments on mere change of opinion. To ....
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....see-company and M/s. Satyam Computer Services Limited, which was not established in the reassessment to justify the reopening. 10. Thus, there being no nexus or live-link with the reasons recorded and the 'formation of belief' to come to a conclusion that there was escapement of income and also since the assessment has been reopened beyond the period of 4 years when there is no failure on the part of the assessee to fully and truly disclose all material facts in the original assessment itself, and there being 'no tangible material' for the reopening of the assessment, the CWT(A) erred in confirming the order of the Assessing Officer. We, therefore, hold that the reopening of the jurisdiction under section 17 is bad in law and is to be quashed. 11. Therefore, we set aside the order of the CWT(A) and allow assessee's grounds on the issue of reopening raised before us in Ground Nos. 1 & 2. Since, we have quashed the reopening of assessment itself, the other grounds on merits of the additions do not require any consideration as they become academic in nature. Accordingly, we allow the appeal WTA. No. 02/Hyd/2012 of the assessee. 12. In other cases of the group, the facts are s....