When there was intensive examination in the first instance in respect of the issue, which was the basis for re-opening of assessment, it was necessary for the AO to indicate, what other material, or objective facts, constituted reasons to believe that the assessee had failed to disclose a material fact, necessitating reassessment proceedings.
That is precisely the “tangible material” which have to exist on the record for the “reasons” (to believe” bearing a “live link with the formation of the belief” as spelt out in Kelvinator. When the assessment is completed, as in the present instance, under Section 143 (3), after the AO goes through all the necessary steps of inquiring into the same issue, the reasons for concluding that reassessment is necessary, have to be strong, compelling, and in all cases objective tangible material. This court discerns no such tangible materials which have a live link that can validate a legitimate formation of opinion, in this case. It is not enough that the AO in the previous instance followed a view which no longer finds favour, or if the latter view is suitable to the revenue; those would squarely be change in opinion. Perhaps, in given fact situations, they can be legitimate grounds for revising an order of assessment under Section 263; but not for re-opening it, under proviso to Section 147.
HIGH COURT OF DELHI AT NEW DELHI
PRONOUNCED ON:06.12.2012
+ WP(C) 7677/2011
MOSER BAER INDIA LIMITED
versus
DEPUTY COMMISSIONER OF INCOME TAX & ORS
JUDGMENT
S. Ravindra Bhat, J. – The petitioner (hereinafter referred to as “assessee”) by these writ proceedings claims a direction for quashing the impugned notice dated 23.07.2010 issued by the first respondent under Section 148 of the Income Tax Act proceedings as well as further orders including the order dated 07.09.2011 dismissing its objections. The assessee filed its income tax return for assessment year 2004-2005 declaring a loss of Rs. 83,36,69,556/- under the normal provisions of the Act, it declared a book loss under Section 115 JB to the tune of Rs. 99,53,40,660/-. The assessee had computed and declared income in respect of its 3 units. All the three are 100% Export Oriented Units (EOU). The first one located at 66 Noida Special Economic Zone (NSEZ) yielded profit of Rs. 10,65,03,063/- in respect of which deduction under Section 10A was claimed. For the second unit (another EOU) at A-164, Sector 80, Noida, the profit of Rs. 2,24,72,84,842/- was declared and a deduction under Section 10B was claimed for this entire amount. In respect of the third unit i.e. 100% EOU at 66 Udyog Vihar, Greater Noida, the assessee declared loss of Rs. 50,53,96,992/- and did not claim any deduction. In the concerned form i.e. 56G, as against the column seeking particulars regarding eligibility for deduction under Section 10A, the assessee declared “Nil”. The assessee later filed a revised return of income and declared Rs. 86,29,74,037/- under normal provisions of the Act and stated that it had inadvertently omitted to claim deduction on previously incurred expenses. In the revised return it made the following claims for deductions under Sections 10A and 10B respectively :
