Case Law Details
RELEVANT PARAGRAPH
12. Under the provisions of Section 147 of the I.T. Act, the Assessing Officer has the power to reassess the income for any Assessment Year where he has a reason lo believe that any income chargeable to tax had escaped assessment for any Assessment Year. The power is also given to Assessing Officer to recompute the loss or the depreciation allowance or any other allowance for the Assessment Year concerned the said power is to be exercised subject to the provisions of Section 148 to 153 of the I. T Act. However, the proviso to Section 147 of the I.T. Act curtail the power of Assessing Officer that where an assessment under Section 143 (3) of the I.T. Act or under Section 148 of the Act had been completed for the relevant Assessment Year, no further action under the present Section i.e., Section 147 of the Act shall be taken after the expiry of 4 years from the end of the relevant Assessment Year. The Section further provides that the Assessing Officer is empowered to exercise his powers beyond the period of 4 years from the end of the relevant Assessment Year in case any income chargeable to tax has escaped assessment by reason of failure on the part of the assessee to file a Return under Section 139 or in response to the notice issued under Section 142(1)/148 of the Act or to disclose fully or truly all necessary facts necessary for the assessment for the relevant Assessment Year The ingredients of Section 147 of the I.T. Act are a reason to believe” by the Assessing Officer that any income chargeable to tax has escaped assessment or the loss or depreciation allowance or any other allowance has been excessively claimed by the assessee for the relevant Assessment Year. However, where the assessment has been completed under Section 143 (3) of the I.T. Act and the assessee claims to have disclosed all the material facts during the course of original assessment proceedings, no action can be taken against the assessee beyond the period of 4 years from the end of the relevant assessment year.
27. From the above, it is established that the powers conferred under Section 147 of the Act for reopening concluded assessment cannot be exercised arbitrarily or mechanically. It must be based on reasons pursuant to amendments brought in Section 147 of the Act, expression ‘reason to believe” was reintroduced, Even the CBDT has issued circulars to the effect that mere change in opinion cannot form the basis for reopening a completed assessment.
28. In the facts of the present case, the relevant details regarding the computation of deduction under Section 80-HHC of (he Act and also the claim of depreciation were deliberated upon by the Assessing Officer by raising queries during the course of assessment proceedings and the same were elaborately considered in the original assessment order passed by the Assessing Officer relating to Assessment Year 1998-99. From the reasons recorded for reopening the assessment relevant to Assessment Year 1998-99. it is apparent that no fresh material came into possession of the Assessing Officer for framing a belief that any part of the income had escaped assessment or excessive allowance had been granted to the assessee The perusal of the seasons recorded by the Assessing Officer for Assessment Year 1998-99 reveals that from the records itself a view contrary to the earlier view taken by the Assessing Officer while completing the original assessment is being Conned. 1 his amounts to change of opinion. which is hit by the provisions of Proviso to Section 147 of the I.T. Act. The original assessment in the case was completed under Section 143 (3) of the I.T. Act, wherein all material facts necessary for completing the assessment were disclosed by the assessee and thereafter on mere change of opinion after the expiry of 4 years from the end of the relevant Assessment Year, the Assessing Officer seeks to reopen the assessment which is clearly not allowable as held by the apex Court and the Hon’ble Bombay ,High Court in series of cases as referred hereinabove. Accordingly, the notice issued under Section 148 of the I. T Act being beyond the period of 4 years from the end of the relevant Assessment Year mere change of opinion and there being no failure on the part of the assessee to disclose the material facts necessary for the completion of the assessment relevant to Assessment Year 1998-99, we quash the notice issued under Section 148 of the I. T. Act and also quash the assessment made pursuant to the said notice. Thus, the ground of appeal No. l raised by the assessee in the Assessment Year 1998-99 is allowed.
