Case Law Details
CIT Vs Kelvinator of India Limited (Supreme Court of India)
Explore the Supreme Court’s ruling on change of opinion in tax assessments & Section 147 amendments post Direct Tax Laws (Amendment) Act, 1987
Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words ‘reason to believe’ but also inserted the word ‘opinion’ in Section 147 of the Act. However, on receipt of representations from the Companies against omission of the words ‘reason to believe’, Parliament re-introduced the said expression and deleted the word ‘opinion’ on the ground that it would vest arbitrary powers in the Assessing Officer. We quote here in below the relevant portion of Circular No.549 dated 31st October, 1989, which reads as follows:
“Amendment made by the Amending Act, 1989, to reintroduce the expression `reason to believe’ in Section 147. –A number of representations were received against the omission of the words `reason to believe’ from Section 147 and their substitution by the `opinion’ of the Assessing Officer. 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 section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended section 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’. Other provisions of the new section 147, however, remain the same.”
FULL TEXT OF THE SUPREME COURT JUDGEMENT
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