TaxTMI 
TaxTMI 
2024 (7) TMI 1665
X X X X Extracts X X X X
X X X X Extracts X X X X
....by the assessee are reproduced as under: Validity of assessment order 1.1 On the facts and in the circumstances of the case and in law, the ld. CIT (A) erred in upholding the order passed u/s 144B, even when no time was given to appellant to furnish replies to the draft assessment order. Reopening of Assessment 2.1 On the facts and in the circumstances of the case and in law, the la. CIT (A) erred in upholding the reopening proceedings even when no new tangible material was found and the reopening was based on materials already on record. 2.2 On the facts and in the circumstances of the case and in law, the Id. CIT (A) erred in upholding the reopening proceedings even when the reopening was only based on a change of opinion. Addition on account of opening balance of FCTR 3.1 On the facts and in the circumstances of the case and in law, the Id. CIT (A) erred in confirming the order of AO charging to tax the opening balance of Foreign Currency Translation Difference (FCTR). 3.2 On the facts and in the circumstances of the case and in law, the Id. CIT (A) ought to have appreciated that even as per transition provi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ining pages 1 to 99. 8. With reference to ground No. 2 challenging reopening proceedings on the ground of 'change of opinion', the Ld. counsel for the assessee referred reasons recorded available on page 2 and 3 of the Paper Book and submitted that no new tangible material or information has been referred by the Assessing Officer for reopening of the assessment, therefore, the Assessing Officer has reopened the assessment merely on the basis of change of opinion on the same very material, which was available to him during the assessment proceedings u/s 143(3) of the Act. The Ld. counsel for the assessee referred to the decision of the Hon'ble Bombay High Court in the case of HDFC Bank Ltd. reported in 162 taxmann.com 390 (Bom). The Ld. counsel also referred to the decision of the Hon'ble Bombay High Court in the case of Castrol India Ltd. reported in 162 taxmann.com 51. 8.1 On the contrary, the Ld. Departmental Representative (DR) referred to the decision of the Hon'ble Punjab and Haryana High Court in the case of Greater Mohali Area Development Authority v. DCIT CWP No. 26125 of 2017. 8.2 The reasons recorded for the year under consideration are reproduced as un....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ital Signature at the bottom of the page)" 9. We have heard rival submission of the parties on the issue of validity of the reassessment. We find that the Ld. CIT (A) has rejected the contention of the assessee that there was no new tangible material and assessment has been reopened merely on the basis of the change of the opinion based on the same material which was available during regular assessment. The Ld. CIT (A) in para 6.2.3 of the impugned order has rejected the contention of the assessee that no new material is available observing as under: "6.2.3 In view of the above, the appellant's contention that all the documents were already available with the Department while completing the assessment earlier u/s. 143(3) of the Act and no other new tangible material was available there to reopen the assessment is not acceptable." 9.1 The Ld. CIT (A) with reference to the foreign exchange gains not offered to tax in accordance with section 43AA r.w.s. 145(2) of the Act upheld the validity of the reassessment on the reasoning that Assessing Officer reopened the assessment in view of change in section 43AA of the Act with retrospective effect from assessment year 20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re was a failure on the part of the Assessing Officer to apply his mind during the original assessment proceedings on the points which assessment was sought to be reopened, it would not be case of change of opinion. 9.4 However, we may like to refer to the finding of the Hon'ble Bombay High Court in the case of HDFC Bank Ltd. (supra) wherein, the Hon'ble High Court has observed that the information which formed reasons to believe for escapement of the assessment was already available during the assessment proceedings and there was nothing new which had been brought on record, then it would be a clear case of change of opinion. The relevant finding of the Hon'ble High Court is reproduced as under: "4. The fact that the reasons recorded by the AO for reopening the assessment are based entirely on the documents already filed by Assessee, cannot be disputed. Mr. Mistri tendered a compilation of documents containing copies of the return of income, the computation of total income, Form No. 3CD, Annual Report and the assessment order. In the annexure to the statement of income filed, there is mention of write off and provisions relating to prior years, which have been add....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of income, was already made available during the assessment proceedings. There was nothing new, which has been brought on record because these materials were on the face of documents available before the AO. Therefore, the ITAT came to a conclusion that it was a clear case of change of opinion." 9.5 Further, the Hon'ble High Court in the case of Castrol India Ltd. (supra) has observed as under: "19. However, Assessing Officers without appreciating the true import of the aforesaid decision of the Supreme Court, continue to reopen assessments on the ground of income having escaped assessment despite the fact that all the material and information was already available with him while passing the original assessment order. Furthermore, while conclusive proof of escapement of income may not be necessary to reopen an assessment, the least that is required is a requisite belief based on tangible material which was Shivgan not accessible to the AO or that which was deliberately withheld by Assessee, which then would amount to non-disclosure of relevant information. When an assessment is sought to be reopened within a period of four years of the end of the relevant assessment yea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Act does not postulate conferment of power upon the Assessing Officer to initiate reassessment proceedings upon a mere change of opinion. On appeal by the department to the Supreme Court in 320 ITR 561(SC), dismissing the appeal, held as under: "On going through the changes, quoted above, made to Section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, re-opening could be done under above two conditions and fulfillment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act [with effect from 1st April, 1989], they are given a go-by and only one condition has remained, viz., that ...4/- www.taxguru.in - 4 - 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 re-open 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 re-open assessments on the basis of "mere change of opinion", which cannot be per s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s, we see no merit in these civil appeals filed by the Department, hence, dismissed with no order as to costs." 9.7 In our opinion, after completion of the assessment u/s 143(3) of the Act, for reopening of the assessment, there has to be some trigger by way of either information received from the external source or from the internal source and without such trigger reopening of the assessment merely to relook into the assessment on the issues, which had been considered during the regular assessment proceedings, will amount to review of the assessment order by the Assessing Officer, which is not permitted in law under the provisions of section 147 of the Act. The Assessing Officer can only reassess the assessment wherever income escaped assessment, and not the review the order passed by him. In view of the above discussion and respectfully following the decision of the Hon'ble Bombay High Court in the case of HDFC Bank Ltd. (supra) and Castrol India Ltd. (supra), we set aside the finding of the Ld. CIT (A) on the issue of validity of the reassessment and we quash the reassessment proceedings. The ground No. 2 of the appeal of the assessee is accordingly allowed. 9.8 Since....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t is pertinent to mention here that while computing the Book Profit an amount of Rs. 4291,01,61,000/- was added back as Disallowed for Provision of expenses. Hence the Net Provision amounting to Rs. 4291,01,61,000/- should have been added back while computing the Income, whereas only an amount of Rs. 3715,28,10,596/-had been added back while computing the taxable income in assessment under normal provision of the IT Act. This has resulted in under assessment of income to the extent of Rs. 575,73,50,404/-. 2.1 Therefore I am of the view that income to the extent of amount of Rs. 575,73,50,404/-, as explained above, has escaped assessment. 2.2 Further, it was noticed that the assessee had claimed amounting to Rs. 1937,62,60,435/- as deduction under section 36(1)(viia) of the IT Act. As per their computation the assessee had claimed deduction of Rs. 1525,44,08,636/- i.e. 10% on aggregate rural advance amounting to Rs. 15254.41 crore from the Rural branch and Rs. 412,18,51,799/- as 7.5% of the Gross total income. The assessee during assessment furnished the list of Rural Branch and aggregate average advance made du....