TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 1200
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.... course of the scrutiny asst. proceedings u/s 143(3), the A.O. had already conducted enquiries on the issues which formed the basis for reopening u/s 147 and hence, the notice u/s 148 issued on the basis of change of opinion, may be declared as null and void in law. 3] The learned CIT(A) erred in confirming the addition u/s 68 of Rs. 83,56,232 by taxing the unsecured loans received from three parties as unexplained cash credits without appreciating that the identity and creditworthiness of the lenders and the genuineness of the loans was duly established by the appellant by furnishing various documentary evidences and therefore, the above addition made for A.Y.2011-12 was sustainable in law and on facts of the case. 4] The learned CIT(A) further erred in confirming the disallowance of Rs. 1,36,378 u/s 40(a)(ia) made by the A.O. towards non deduction of interest paid to Tata Motors Finance Ltd. without appreciating that the payee was a listed NBFC who had offered the impugned interest income on loan to tax and hence, the said disallowance was not justified on facts of the case and in law. 5] The appellant craves leave to add/ alter/ amend any of the ground....
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.... a huge loan, it is very evident that he will not be in a position to advance such huge loan to the assessee. Hence payment of Rs. 45,73,732/- to the assessee is very impossible. The source of Vaishali Deore is not given. In all the above transactions, assessee has not produced or corroborated with evidence that they are genuine. The conclusion drawn is the assessee introduced her own money in the guise of unsecured loans. The same may be added to the total income u/s 68 of the I.T. Act, 1961, as genuineness and creditworthiness not proved with evidence." 5. Subsequently, after issuing notice u/s. 142(1) of the Act, the assessee filed detailed written submissions stating that the issues referred in the reasons recorded already stands examined and supporting documentary evidences were filed. However, ld. Assessing Officer was not satisfied with these submissions. Except for the issue of cash payments in contravention of section 40A(3) of the Act and unsecured loans taken from Akash Foods and Feeds for which Assessing Officer was satisfied with the reply filed by the assessee and reassessment proceedings were concluded after making addition u/s. 68 of the Act at Rs.83,56,232 and d....
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....ther hand, ld. Departmental Representative vehemently argued supporting the order of ld.CIT(A) and submitted that the Assessing Officer has reason to believe that income has escaped assessment and that the reassessment proceedings have been initiated within four years from the end of the assessment year and therefore valid reassessment proceedings have been carried out. 9. We have heard the rival contentions and perused the record placed before us. The validity of reassessment proceedings and assumption of jurisdiction for carrying out the reassessment proceedings has been challenged by the assessee on the ground that the reasons for which the reassessment proceedings have been initiated are on the issues which already stood examined by the Assessing Officer during the course of first round of assessment proceedings u/s. 143(3) of the Act and there being no new tangible material found against the assessee or any other material or evidence which was not disclosed by the assessee in the income tax return during the course of assessment proceedings u/s. 143(3) of the Act, therefore in such situation, the reassessment proceedings initiated in the instant case are bad in law and liab....
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....ails including PAN, Address, Confirmations, 7/12 extract and also bank details through which loans were received. Regarding genuineness of the transactions assessee stated that the alleged loans were mainly taken from the relatives. Now on due consideration of all these details ld. Assessing Officer has accepted the submissions of the assessee and did not made any addition u/s. 68 of the Act. 12. Now at the time of issuing notice u/s. 148 of the Act, ld. Assessing Officer had no new tangible material which has been independently procured or any other information which was not submitted by the assessee during the course of assessment proceedings along with return of income. It is a clear case of change of opinion and rather reviewing of its own order because the very same details have been again considered by the Assessing Officer for issuing notice u/s. 148 of the Act. 13. Similarly for the issue of disallowance u/s. 40(a)(ia) of the Act the same pertains to interest paid to Tata Motors Finance Ltd. which is a Non Banking Financial institution for non deduction of tax at source on the vehicle loan interest of Rs.1,36,378. This issue was also specifically raised by the Assessi....
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....t year concerned (hereafter in sections 148 to 153 referred to as the relevant assessment year)." 4. After the enactment of the Direct Tax Laws (Amendment) Act, 1987, ie, prior to 1st April 1989, s. 147 of the Act, reads as under: 147: Income escaping assessment. If the AO, for reasons to be recorded by him in writing, is of the opinion that any income chargeable to tax has escaped assessment for any assessment year, he may subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year)" 5. After the Amending Act, 1989, s. 147 reads as under: 147. Income escaping assessment If the AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may subject to the provisions of sections 148 to 153, assess....
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....elieve", Parliament reintroduced 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 dl. 31st Oct., 1989 ((1990) 182 ITR (St.) 1, 29), 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 allay these fears, the Amending Act, 1989, has again amended s. 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'. 7. For the aforestated reasons, we see no merit in these civil appeals filed by the Department, hence, dismissed with no order as t....