TaxTMI 
TaxTMI 
2025 (6) TMI 1839
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Income Tax Act, 1961 (for short, 'the Act') and the consequential proceedings. 2. Respondent is the assessee. Respondent had filed a return of income on 27.10.2000 for assessment year 2000-01, and an intimation under Section 143(1) of the Act was issued. No proceedings for assessment had taken place thereafter. 3. A notice dated 22.11.2006 under Section 148 of the Act came to be issued, informing the assessee that there was reason to believe that income chargeable to tax for AY 2000-01 has escaped assessment, within the meaning of Section 147 of the Act. By a letter dated 04.12.2016, assessee replied that there was no reason to believe, and requested reasons for reopening. The assessee was provided the reasons for reopening ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0, the writ petition came to be allowed. 5. The assessee had purchased two wind turbines, one each during AY 1996-97 and 1997-98, under hire purchase agreement, from one REPL Group Companies. These turbines were leased back to REPL Group Companies. Subsequently, the assessee realised that the wind turbines were fraudulently removed by the lessee REPL. Assessee voluntarily withdrew the entire transaction claim, i.e. depreciation on the wind turbine, interest paid and lease rental income for tax purposes and paid the resultant tax thereon with revised return for both assessment years 1996- 97 and 1997-98. The Department accepted the revised returns, and assessment orders under Section 143(3) of the Act have been passed. 6. Mr.Ramana Kum....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is not permissible; c) The reason to believe itself indicates that it is a fishing inquiry because it says "... claim has to be verified"; d) If verification is required to be made, then there cannot be a reason to believe escapement of income. 8. In any case, the reasons recorded are ambiguous and vague, and as held in Hindustan Lever Ltd vs. R.B.Wadkar [2004(268) ITR 332 (Bom)], the reasons recorded must disclose the officer's mind because the reasons are the manifestation of mind of the Assessing Officer. The reasons recorded should be self-explanatory and should not keep the assessee guessing for the reasons, and it has to provide link between the conclusion and evidence. 9. Admittedly, the notice issued is b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ction 147 of the Act [with effect from 1st April, 1989], they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post 1st April, 1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words reason to believe failing which, we are afraid, Section 147 would give arbitrary powers to the Assessing Officer to reopen assessments on the basis of "mere change of opinion", which cannot be per se reason to reopen. We must also keep in mind the conceptual difference between power to review and power to reassess. The Assessing Officer has no power to rev....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d against the omission of the words `reason to believe- from Section 147 and their substitution by the `opinion- of the Assessing Officer. 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 section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended section 147 to reintroduce the expression `has reason to believe- in place of the words `for reasons to be recorded by him in writing, is of the opinion-. Other provisions of the new section 147, however, remain the same." For the afore-....