1982 (12) TMI 65

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....ment proceedings the ITO had granted the development rebate @ 25%. Subsequently, as a consequence of audit objection, the ITO resorted to s. 147(b)/148 proceedings and allowed the development rebate @ 15% with the following observations: "It has been pointed out by the audit that as the machinery installed by the appellant, according to the appellant's own description, did not and could not manufacture any of the things or articles under any of the items of the Fifth Schedule to the Income-tax Act, 1961, the development rebate allowed at a higher rate should be withdrawn." 3. When the assessee questioned the legality of s. 147(b) proceedings before the AAC, the AAC rejected the contention of the assessee observing that "There is no su....

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....ative belief is enough to warrant reopening proceedings. Regarding change of opinion, he submitted that the ITO in the original proceedings did not form any opinion, whatsoever, and he placed his reliance on the case of Tarachand Ghanshyamdas vs. CIT (1982) 26 CTR (Cal) 353. 6. After taking into consideration the rival submissions and going through the facts on record, we are unable to sustain the finding of the AAC for the two years under consideration. We are unable to accept the contention of the ld. departmental representative that the ITO did not form any opinion in the course of original proceedings. When we pursue the original assessment order, we find that for both the years under consideration the ITO first added the amount of d....

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.... law. The finding of the AAC in this regard for both the years under consideration is reversed. Reliance of the ld. departmental representative on the case of Tarachand Ghanshyamdas is misplaced. We may be with the ld. departmental representative on the limited issue that ss. 154 and 147(b) proceedings are quite different but while adjudicating the issue pertaining to s. 154 proceedings in the assessee's own case in respect of asst. yr. 1972-73, we had made the following observations in ITA No. 547/Chandi/1980 dt. 18th Oct, 1982 while accepting the assessee's contention: "4. After taking into consideration the rival submissions, we are unable to sustain the finding of the AAC. The most important fact which is not controverted by the ld. ....