TaxTMI 
TaxTMI 
2022 (10) TMI 1297
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.... and in the circumstances of the case and in Law, the Ld. CIT(A) was right in deleting the addition of Rs. 2,79,54,39,101/ and holding that the Share Premium received by the Company is capital in nature and the same cannot be assessed u/s. 68 of the Act, without appreciating the finding in the assessment order that as the assessee had failed to justify charging of such huge premium of Rs. 46,821/ per share, the very nature of receipt remained unexplained, thereby attracting provisions of section 68?" 3. "Whether on the facts and in the circumstances of the case and in Law, the Id. CIT(A)was correct in deciding the issue in favour of assessee solely relying on the decision of Hon'ble ITAT in the case of Green Infra Ltd. (ITA No. 7762/Mum/2012, order dated 23.08.2013), without appreciating the legal position that the said issue has not attained finality since departments appeal filed us. 260A against the said decision was still pending before the Hon'ble Bombay High Court?" 4. "Whether on the facts and circumstances of the case and in Law, the Ld. CIT(A) has erred in holding that the Share premium was justified by assessee, ignoring the findings of the Asses....
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....othing but a change of opinion. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in upholding the action of the Assessing Officer in reopening the assessment despite the fact that no new material received by the Id Assessing Officer and he reopened the case based on the existing records. 3. Briefly stated facts of the case are that the assessee filed return of income for the year under consideration on 29/09/2009 declaring total income at Rs. Nil. The scrutiny assessment under section 143(3) of the Income-tax Act, 1961 (in short 'the Act') was completed on 26/09/2011, wherein total income was assessed at Nil. Subsequently, the Assessing Officer reopened the assessment after recording reasons to believe that income escaped assessment and issued notice under section 148 of the Act on 28/03/2014. In the reassessment completed on 30/03/2015, the Assessing Officer, held share capital received from the shareholders during the year under consideration as unexplained cash credit under section 68 of the Act. Further, the Ld. Assessing Officer held that share premium received by the assessee constitutes revenue receipt and hence brought to tax....
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....ecision of State Bank of India Vs ACIT (2018) 96 taxmann.com 77 (Bom) and PCIT Vs Motilal Todi (ITXA 1287 of 2016 dated 28/01/2019)(Bom-HC). The Ld. counsel also distinguished the decision in the case of Export Credit Guarantee Corporation of India Ltd Vs ACIT (supra) and Dr Amin Pathology laboratory Vs JCIT (supra) relied upon by the Assessing Officer. 7. The Ld. DR on the other hand relied on the finding of the Ld. CIT(A) and the Assessing Officer and submitted that the assessment was validly reopened by the Assessing Officer. 8. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The issue in dispute before us is whether the reasons recorded by the Assessing Officer to believe that income escaped assessment are merely based on change of opinion without there being any tangible material. For adjudication of issue in dispute it is relevant to refer the reasons recorded by the Assessing Officer, which are available on page 26 to 27 of the paperbook. For ready reference, same are extracted as under: "The assessee, M. Pallonji Enterprises Pvt. Ltd. having PAN: AAFCM3357A is an assessee of this charge. ....
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.... Mumbai before issue of notice u/s 148 of the I.T. Act. Issue notice u/s 148 of the Act of the assessee." 8.1 On perusal of the above reasons recorded, it is evident that there was no new tangible material before the Assessing Officer to invoke a trigger for making belief that income escaped assessment. The Assessing Officer has himself mentioned that for reopening the assessment within four years from the end of the relevant assessment year, there should be some tangible material to do so. For reopening the assessment there has to be some trigger by way of a fresh material or information, which make the Assessing Officer to relook into the completed assessment. It cannot be a situation where an Assessing Officer suddenly wake up a fine morning and say that income had escaped assessment in case of an assessee. The trigger for reason to believe that income escaped assessment may be in the form tangible material, which may be information or material external to assessment record or information from other assessment year etc. (i.e. internal source), but same cannot be by way of a dream or rethinking on same material, which will be in the nature of review of the assessment rather th....
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....t quashed the reopening on the ground that there was no new material despite the case being reopened within four years from the end of the relevant assessment year. Further we know that Hon'ble Supreme Court in the case of Kelvinator of India Ltd (2010) 320 ITR 561 held the concept of change opinion is an inbuilt test check on abuse of power of the Assessing Officer. The relevant finding of the Hon'ble Supreme Court is reproduced as under: "Income escaping assessment. 147. If- [a] the Income-tax Officer has reason to believe that, by reason of the omission or failure on the part of an assessee to make a return under section 139 for any assessment year to the Income-tax Officer or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, or [b] notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income- tax Officer has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of....
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....t-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 se reason to re-open. We must also keep in mind the conceptual difference between power to review and power to reassess. The Assessing Officer has no power to review; he has the power to re-assess. But reassessment has to be based on fulfillment of certain pre-condition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of re-opening 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, Assessing Officer has power to re-open, 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, a....