M/s Responsible Builders Pvt. Ltd., New Delhi V. ACIT, New Delhi

CO 206/DEL/2011

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0544 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 12 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 06-04-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 28-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Assessee Lawyers: SATISH SACHDEVA; S S H KVSR KRISHNA
• Keywords: Reopening of assessment; Business income; Search and seizure; Audit objection; Tangible material; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F : NEW DELHI BEFORE SH. G.C. GUPTA, VICE PRESIDENT AND SH. INTURI RAMA RAO , ACCOUNTANT MEMBER ITA NO . 2726 /DEL / 20 11 ASSESSMENT YEAR: 2006 - 07 ACIT, CIRCLE 15(1), VS. M/S RESPONSIBLE BUILDERS PVT. LTD. C.R. BLDG., I.P. ESTATE, 25, GROUND FLOOR, WORLD TRADE NEW DELHI CENTRE, BARAKHAMBA LANE, NEW DELHI. (PAN: AAACR5551J ) (APPELLANT) (RESPONDENT) AND C.O. NO. 206/DEL/2011 [IN ITA NO. 2726/DEL /2011] ASSESSMENT YEAR: 2006 - 07 M/S RESPONSIBLE BUILDERS PVT. LTD. VS. ACIT, CIRCLE 15(1), 25, GROUND FLOOR, WORLD TRADE C.R. BLDG., I.P. ESTATE, CENTRE, BARAKHAMBA LANE, NEW DELHI NEW DELHI. (PAN:AAACR5551J) (APPELLANT) (RESPONDENT) ASSESSEE BY : S /S H. KVSR KRISHNA, CA & SATISH SACHDEVA, CA DEPARTMENT BY : SH. VIKRAM SAHAY, SR. DR DATE OF HEARING: 06.04.2015 DATE OF PRONOUNCEMENT: 10.04.2015 ORDER PER INTURI RAMA RAO, A.M. : C.O. NO. 206/DEL/2011 IN ITA NO. 2726/DE/2011 THE CROSS OBJECTION S ARE FILED BY THE ASSESSEE COMPANY CHALLENGING THE REOPENING OF THE ASSESSMENT ALREADY MADE UNDER SECTION 143 (3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) . SINCE THE CROSS OBJECTION 2 ITA NO. 2726/DEL/2011 & C.O. NO. 206/DEL/2011 GO ES TO THE ROOT OF THE MATTER, WE DEEM IT PROPER TO FIRST ADJU DICATE UPON THE CROSS OBJECTION FILED BY THE ASSESEE COMPANY. 2. THE BRIEF FACTS LEADING TO THE P RESENT CROSS OBJECTIONS AS FOLLOWS: 2 .1 THE ASSESSEE COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956, IS ENGAGED IN THE BUSINESS OF INVESTMENTS AND FINANCE FOR THE ASSESSMENT YEAR 2006 - 07. THE ASSESSEE FILED RETURN OF INCOME ON 28 TH AU GUST, 2006 DECLARING TOTAL INCOME AT RS. 3,06,37,449/ - . SUBSEQUENTLY, AFTER IS SUING NOTICE UNDER SECTION 143(2 ) OF THE ACT, THE ASSESSMENT WAS COMPLETED 143(3) BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 15(1), NEW DELHI. SUBSEQUENTLY, THE ASSESSIN G OFFICER ISSUED NOTICE UNDER SECTION 148 DATED 30 TH MARCH, 2010 PROPOSING TO REASSESS THE SHORT TERM CAPITAL GAINS OF RS. 3,06,3 7,449/ - AS BUSINESS INCOME. DURING THE COURSE OF REASSESSMENT PROCEEDINGS, THE ASSESSEE COMPANY CONTENDED TH AT THE NOTICE UNDER SECTION 148 OF THE ACT WAS NOT VALID, INASMUCH AS , THE VERY SAME ISSUE WAS CONSIDERED BY THE ASSESSING OFFICER AT THE TIME OF FRAMING THE ORIGINAL ASSESSMENT. BRUSHING ASIDE THE CONTENTION OF THE ASSESSEE, THE ASSESSING OFFICER FINALLY PASSED THE REASSESS MENT ORDER ON 13.10.2010 TREATING THE INCOME FROM SHORT TERM CAPITAL GAINS AS BUSINESS INCOME. 3. AGGRIEVED BY THE ABOVE ORDER, THE ASSESSEE COMPANY F ILED AN APPEAL BEFORE THE LEARNED CIT(A) WHO VIDE ORDER DATED 15.02.2011, UPHELD THE REASSESSMENT PROCEEDINGS, HOWEVER, HAD CONCLUDED THAT THE RETURN ED CAPITAL GAINS SHOULD NOT BE TREATED AS BUSINESS INCOME BUT AS A SHORT TERM CAPITAL GAINS ONLY. SINCE THE ASSESSEE COMPANY IS AGGRIEVED BY THAT PART OF THE ORDER 3 ITA NO. 2726/DEL/2011 & C.O. NO. 206/DEL/2011 PERTAINING TO THE REOPENING OF THE ASSES SMENT, THE PRESENT CROSS OBJECTION HAS BEEN FILED, RAISING THE FOLLOWING GROUNDS : 1. THAT THE LEARNED CIT (A) - XVIII HAS ERRED IS HOLDING THAT THE PROVISIONS OF SECTION 147/148 OF THE INCOME TAX ACT, 1961 READ WITH EXPLANATION (2) THEREOF ARE APPLICABLE IN THE CASE. 2. THAT THE LEARNED CIT (A) - XVIII FURTHER ERRED IN HOLDING THAT REASONS RECORDED BY THE ASSESSING OFFICER ARE VALID. IT IS CONTENDED THAT THE REASONS RECORDED BY THE ASSESSING OFFICER ARE NOT IN ACCORDANCE WITH LAW AS HE HAS STATED THAT SALE & PURCHASE OF SHARES WAS ACTUALLY ACCRETION / DEPLETION OF ITS STOCK IN TRADE (CAMOUFLAGED BY THE ASSESSEE AS INVESTMENTS) AND CONSEQUENTLY ANY PROCEEDS OUT OF SALE / PURCHASE OF THESE SHARES WAS BUSINESS INCOME OF THE ASSESSEE. IT IS FURTHER CONTENDED THAT THE ASSESSING OFFICER HAS WRONGLY STATED THAT INCOME OF RS. 3,06,37,449/ - HAS ESCAPED ASSESSMENT BY VIRTUE OF EITHER OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. 3. THAT THE LEARNED CIT( A) - XVIII HAS ERRED IN HOLDING THAT IT IS NOT A CASE OF CHANGE OF OPINION WHERE NO NEW FACTS OR MATERIAL HAS BEEN BROUGHT ON RECORDS IN THE REASSESSMENT PROCEEDINGS. IT IS CONTENDED THAT THE AUDIT OBJECTION WITHOUT MENTIONING ANY FACT(S) CANNOT BE BASIS OF REOPENING OF ASSESSMENT UNDER SECTION 147/ 148 OF THE INCOME TAX ACT, 1961 . IT IS FURTHER CONTENDED THAT ALL THE DETAILS AND DOCUMENTS RELATING TO THE ISSUE INVOLVED HAS ALREADY BEEN SUBMITTED DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS AS PER THE SPECIFIC QUERY(S) RAISED BY THE ASSESSING OFFICER. 4. THE ABOVE GROUNDS OF CROSS OBJECTIONS ARE WITHOUT PREJUDICE TO ONE AND ANOTHER. 5. THE RESPONDENT CRAVES TO BE ALLOWED, TO ADD, TO ALTER/AMEND OR DELETE ANY OTHER GROUNDS OF CROSS - OBJECTIONS. 4 . B EFORE US, IT WAS CONTENDED ON BEHALF OF THE OF THE ASSESSEE COMPANY THAT THERE IS NO FRESH TANGIBLE MATERIAL BROUGHT ON RECORD BY THE ASSESSING OFFICER SUGGESTING THE ESCAPEMENT OF CHARGEABLE INCOME. IT IS NOTHING BUT CHANGE OF OPINION ON THE SAME SET OF F ACTS AS ARE AVAILABLE AT THE TIME OF FRAMING THE ORIGINAL ASSESSMENT. IN THIS CONNECTION, THE LEARN ED AUTHORIZED REPRESENTATIVE 4 ITA NO. 2726/DEL/2011 & C.O. NO. 206/DEL/2011 HAS PLACED RELIANCE ON THE DECISION OF HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. USHA INTERNATIONAL LTD., 348 ITR 485 . 5 . LEARNED DEPARTMENTAL REPRESENTATIVE HAD HEAVILY SUPPORTED THE ORDER OF LEARNED CIT(A) ON THE ISSUE OF REOPENING AND DREW OUR ATTENTION TO PARA 5.2 OF THE SAID CIT(A) S ORDER. 6 . WE HAVE HEARD THE RIVAL PARTIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, W E ARE REQUIRED TO ADJUDICATE UPON WHETHER THE REASSESSMENTS PROCEEDINGS ARE PROPERLY LAUNCHED BY THE ASSESSING OFFICER OR VITIATED BY MERE CHANGE OF THE OPINION. WE FIND FROM THE MATERIAL AVAILABLE ON RECORD THAT THE VERY SAME ISSUE WAS CONSIDERED BY THE ASSESSING OFFICER AT THE TIME OF ORIGINAL ASSESSMENT. THE ASSESSING OFFICER HAD RAISED A SPECIFIC QUERY, AS TO WHY THE SHORT TERM CAPITAL GAINS SHOULD NO T BE TREATED AS BUSINESS INCOME. AFTER CONSIDERATION OF REPLY FILED BY THE ASSESSEE, THE ASSESSING OFFICER ACCEPTED THE CLAIM. FURTHER, IT IS TRITE LAW THAT IN ORDER TO DETERMINE WHETHER THERE ARE REASONS TO BELIEVE THAT THE INCOME GOT ESCAPED THE ASSESSMENT , ONE HAS TO LOOK AT THE REASONS RECORDED BY THE ASSESSING OFFICER BEFORE THE ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT. IN THIS CASE, THE REASONS RECORDED BY THE ASSESSING OFFICER ARE AS FOLLOWS: THE ASSESSMENT OF M/S RESPONSIBLE BUILDERS (P) LTD. FOR THE A.Y. 2006 - 07 WAS COMPLETED AFTER SCRUTINY IN SEPTEM BER, 2008, DETERMINING AN INCOME OF RS. 30637449, AS SHORT TERM CAPITAL GAIN. THE ASSESSEE IS A NON BANKING FINANCIAL COMPANY ENGAGED IN THE BUSINESS OF INVESTMENT. THEREAFTER IT WAS OBSERVED THAT THE ASSESSEE DID NOT MAINTAIN ANY SEPARATE STOCK - IN - TRADE A CCOUNT AND ENTIRE SALE/PURCHASE OF SHARES HAD BEEN CLASSIFIED AS INVESTMENT. SINCE THE ONLY BUSINESS ACTIVITY OF THE ASSESSEE WAS INVESTMENT FOR EARNING CAPITAL GAINS FROM THE MARKET , THE SALE/PURCHASE OF SHARES BY THE ASSESSEE WAS ACTUALLY ACCRETION/DE PLETION IN ITS STOCK - IN - TRADE (CAMOUFLAGED BY THE ASSESSEE AS 5 ITA NO. 2726/DEL/2011 & C.O. NO. 206/DEL/2011 INVESTMENTS) AND CONSEQUENTLY ANY PROCEEDS OUT OF SALE/PURCHASE OF THESE SHARES WAS BUSINESS INCOME OF THE ASSESSEE. HON BLE SUPREME COURT HAD HELD IN THE CASE OF G. VENKATA SWAMI NAIDU & CO. VS. CIT(1959) 35 ITR 594 (SC) THAT IN CASES WHERE THE PURCHASE HAS BEEN MADE SOLELY AND EXCLUSIVELY WITH THE INTENTION OF RESALE AT A PROFIT AND THE PURCHASER HAS NO INTENTION OF HOLDING THE PROPERTY FOR HIMSELF OR OTHERWISE ENJOYING IT OR USING IT THE PRE SENCE OF SUCH INTENTION WOULD RAISE A STRONG PRESUMPTION THAT THE TRANSACTION IS IN THE NATURE OF TRADE. IN THE INSTANT CASE, THE ASSESSEE IS BASICALLY AN INVESTOR AND THE PURCHASE AND SALE OF SHARES ARE VERY MUCH ALLIED TO ITS USUAL BUSINESS. THE SHARES H AVE BEEN PURCHASED IN VERY LARGE QUANTITIES, WHICH ELIMINATE THE POSSIBILITY OF INVESTMENT FOR PERSONAL USE POSSESSION OR ENJOYMENT. FURTHER, THE SHARE PURCHASE/SALE TRANSACTIONS ARE REPETITIVE IN NATURE IN THE CASE OF ASSESSEE. IN VIEW OF THE ABOVE FACT S, I HAVE REASONS TO BELIEVE THAT INCOME OF RS. 3,06,37,449/ - HAS ESCAPED ASSESSMENT BY VIRTUE OF EITHER OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY OR TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT IN THIS YEAR IN THIS CASE AND TH E SAME IS TO BE BROUGHT TO TAX UNDER SECTION 147/148 OF THE I. TAX ACT. 7 . ON PERUSAL OF ABOVE REASONS, IT IS CLEAR THAT THE ASSESSING OFFICER HAD NOT REFERRED ANY MATERIAL WHICH MADE HIM TO BELIEVE THAT INCOME GOT ESCAPED ASSESSMENT. WE ALSO FIND THAT WHAT THE ASSESSING OFFICER RECORDED IS ONLY THE CONCLUSION NOT THE REASONS, INASMUCH AS, THE REASONS RECORDED DOES NOT INDICATE AS TO HOW INCOME GOT ESCAPED ASSESSMENT. THEREFORE, WHAT IS MENTIONED AS REASONS CANNOT BE CALLED THE REASONS , BUT ONLY CONCLUSI ONS. 8 . THE LEARNED CIT(A) UPHELD THE REASSESSMENT PROCEEDINGS MERELY ON THE REASONING THAT THE ASSESSING OFFICER HAD NOT ASSIGNED ANY REASON FOR ACCEPTING THE CAPITAL GAINS MADE OUT OF SALE OF SHARES AS SHORT TERM CAPITAL GAINS. THIS, IN OUR VIEW, CANNO T BE A VALID REASON. IF A CLAIM MADE BY THE ASSESEE IN THE RETURN IS NOT REJECTED, IT STANDS ALLOWED. IF SUCH A CLAIM IS SCRUTINIZED BY THE ASSESSING OFFICER DURING ASSESSMENT, IT MEANS HE WAS CONVINCED ABOUT THE VALIDITY OF THE 6 ITA NO. 2726/DEL/2011 & C.O. NO. 206/DEL/2011 CLAIM. HIS FORMATION OF OPI NION IS THUS COMPLETED. FURTHER, FRAMING OF THE ASSESSMENT ORDER IS NOT IN THE CONTROL OF THE ASSESSEE, THEREFORE, FOR ANY OMISSIONS OR COMMISSIONS IN THE ASSESSMENT ORDER CANNOT BE ATTRIBUTABLE TO THE ASSESEE. IN THIS CONNECTION, WE RELY ON THE DECISION O F HON BLE GUJARAT HIGH COURT IN THE CASE OF GUJARAT POWER CORPORATION LTD. VS. ACIT, 350 ITR 266 . THE HON BLE HIGH COURT HELD VIDE PAGE NO. 294 AS FOLLOWS: 'THE POWERS UNDER SECTION 147 OF THE ACT ARE SPECIAL POWERS AND PECULIAR IN NATURE WHERE A QUASI - JUD ICIAL ORDER PREVIOUSLY PASSED AFTER FULL HEARING AND WHICH HAS OTHERWISE BECOME FINAL IS SUBJECT TO REOPENING ON CERTAIN GROUNDS. ORDINARILY, A JUDICIAL OR QUASI - JUDICIAL ORDER IS SUBJECT TO APPEAL, REVISION OR EVEN REVIEW IF STATUTE SO PERMITS BUT NOT LIA BLE TO BE REOPENED BY THE SAME AUTHORITY. SUCH POWERS ARE VESTED BY THE LEGISLATURE PRESUMABLY IN VIEW OF THE HIGHLY COMPLEX NATURE OF ASSESSMENT PROCEEDINGS INVOLVING A LARGE NUMBER OF ASSESSEES CONCERNING MULTIPLE QUESTIONS O F CLAIMS, DEDUCTIONS AND EXEM PTIONS, WHICH ASSESSMENTS HAVE TO BE COMPLETED IN A TIME FRAME. TO PROTECT THE INTERESTS OF THE REVENUE, THEREFORE, SUCH SPECIAL PROVISIONS ARE MADE UNDER SECTION 147 OF THE ACT. HOWEVER, IT MUST BE APPRECIATED THAT AN ASSESSMENT PREVIOUSLY FRAMED AFTER SC RUTINY WHEN REOPENED, RESULTS INTO CONSIDERA BLE HARDSHIP TO THE ASSESSEE. THE ASSESSMENT GETS REOPENED NOT ONLY QUA THOSE GROUNDS WHICH ARE RECORDED IN THE REASONS, BUT ALSO WITH RESPECT TO ENTIRE ORIGINAL ASSESSMENT, OF COURSE AT THE HANDS OF THE REVENUE. THIS OBVIOUSLY WOULD LEAD TO CONSIDERABLE HARDSHIP AND UNCERTAINTY. IT IS PRECISELY FOR THIS REASON THAT EVEN WHILE RECOGNIZING SUCH POWERS, IN SPECIAL REQUIREMENTS OF THE STATUTE, CERTAIN SAFEGUARDS ARE PROVIDED BY THE STATUTE WHICH ARE ZEALOUSLY GUARDED BY THE COURTS. INTERPRETING SUCH STATUTORY PROVISIONS COURTS UPON COURTS HAVE HELD THAT AN ASSESSMENT PREVIOUSLY FRAMED CANNOT BE REOPENED ON A MERE CHANGE OF OPINION. IT IS STATED THAT POWER TO REOPENING CANNOT BE EQUATED WITH REVIEW. BEARING IN MIND THE SE CONFLICTING INTERESTS, IF WE REVERT BACK TO CENTRAL ISSUE IN DEBATE, IT CAN HARDLY BE DISPUTED THAT ONCE THE ASSESSING OFFICER NOTICES A CERTAIN CLAIM MADE BY THE ASSESSEE IN THE RETURN FILED, HAS SOME DOUBT ABOUT ELIGIBILITY OF SUCH A CLAIM AND, THEREF ORE, RAISES QUERIES, EXTRACTS RESPONSE FROM THE ASSESSEE, THEREAFTER IN WHAT MANNER SUCH CLAIM SHOULD BE TREATED IN THE FINAL ORDER OF ASSESSMENT, IS AN ISSUE ON WHICH THE ASSESSEE WOULD HAVE NO CONTROL WHATSOEVER. WHETHER THE ASSESSING OFFICER ALLOWS SUCH A CLAIM, REJECTS SUCH A CLAIM OR PARTIALLY ALLOWS AND PARTIALLY REJECTS THE CLAIM, ARE ALL OPTIONS AVAILABLE WITH THE ASSESSING OFFICER, OVER WHICH THE ASSESSEE BEYOND TRYING TO PERSUADE THE ASSESSING OFFICER, WOULD HAVE NO CONTROL WHATSOEVER. THEREFORE, WHILE FRAMING THE ASSESSMENT, ALLOWING THE CLAIM FULLY OR PARTIALLY, IN WHAT MANNER THE ASSESSMENT ORDER SHOULD BE FRAMED, IS TOTALLY BEYOND THE CONTROL OF THE ASSESSEE. IF THE ASSESSING OFFICER, THEREFORE, 7 ITA NO. 2726/DEL/2011 & C.O. NO. 206/DEL/2011 AFTER SCRUTINIZING THE CLAIM MINUTELY DURING THE ASSESSMENT PROCEEDINGS, DOES NOT REJECT SUCH A CLAIM, BUT CHOOSES NOT TO GIVE ANY REASONS FOR SUCH A COURSE OF ACTION THAT HE ADOPTS, IT CAN HARDLY BE STATED THAT HE DID NOT FORM AN OPINION ON SUCH A CLAIM. IT IS NOT UNKNOWN THAT ASSESSMENTS OF LARGER CORP ORATIONS IN THE MODEM DAY, INVOLVE LARGE NUMBER OF COMPLEX CLAIMS, VOLUMINOUS MATERIAL, NUMEROUS EXEMPTIONS AND DEDUCTIONS. IF THE ASSESSING OFFICER IS BURDENED WITH THE RESPONSIBILITY OF GIVING REASONS FOR SEVERAL CLAIMS SO MADE AND ACCEPTED BY HIM, IT WO UL D EVEN OTHERWISE CAST AN UNREA SONABLE EXPECTATION WHICH WITHIN THE SHORT FRAME OF TIME AVAILABLE UNDER LAW WOULD BE TOO MUCH TO EXPECT HIM TO CARRY. IRRESPECTIVE OF THIS, IN A GIVEN CASE, IF THE ASSESSING OFFICER ON HIS OWN FOR THE REASONS BEST KNOWN TO HIM, CHOOSES 'NOT TO ASSIGN REASONS FOR NOT REJECTING THE CLAIM OF AN ASSESSEE AFTER THOROUGH SCRUTINY, IT CAN HARDLY BE STATED BY THE REVENUE THAT THE ASSESSING OFFICER CANNOT BE SEEN TO HAVE FORMED ANY OPINION ON SUCH A CLAIM. SUCH A CONTENTION, IN OUR O PINION, WOULD BE DEVOID OF MERITS. 1FT A CLAIM MADE BY THE ASSESSEE IN THE RETURN IS NOT REJECTED, IT STANDS ALLOWED. IF SUCH A CLAIM IS SCRUTINIZED BY THE ASSESSING OFFICER DURING ASSESSMENT, IT MEANS HE WAS CONVINCED ABOUT THE VALIDITY OF THE CLAIM. HIS FORMATION OF OPINION IS THUS COMPLETE. 9 . FURTHER, THERE WAS NO REFERENCE TO ANY FRESH MATERIAL SUGGESTING THE ESCAPEMENT OF INCOME. IN OTHER WORDS, THE ASSESSING OFFICER WAS MERELY GUIDED BY CHANGE OF OPINION BASED ON THE SAME SET OF FACTS AVAILABLE ON RECORD AT THE TIME OF FRAMING THE ORIGINAL ASSESSMENT. IT IS SETTLED PROPOSITION OF LAW THAT EVEN AFTER THE AMENDMENT IN THE PROVISIONS OF SECTION 147/148 OF THE ACT W.E.F. 01.04.1989 MERE CHANGE OF OPINION CANNOT GIVE RISE TO THE VALID REAS SESSMENT PROCEE DINGS. WE ARE FORTIFIED BY THE VIEW OF HON BE SUPREME COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD., 320 ITR 561 . THE RELEVANT PARA IS EXTRACTED BELOW : W E FIND THAT, PRIOR TO DIRECT TAX LAWS (AMENDMENT) ACT, 1987, RE - OPENING COULD BE DONE UNDER AB OVE TWO CONDITIONS AND FULFILMENT OF THE SAID CONDITIONS ALONE CONFERRED JURISDICTION ON THE ASSESSING OFFICER TO MAKE A BACK ASSESSMENT, BUT IN SECTION 147 OF THE ACT [WITH EFFECT FROM 1ST APRIL, 1989], THEY ARE GIVEN A GO - BY AND ONLY ONE CONDITION HAS RE MAINED, VIZ., THAT WHERE THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, CONFERS JURISDICTION TO RE - OPEN THE ASSESSMENT. THEREFORE, POST - 1ST APRIL, 1989, POWER TO 8 ITA NO. 2726/DEL/2011 & C.O. NO. 206/DEL/2011 RE - OPEN IS MUCH WIDER. HOWEVER, ONE NEEDS TO GIVE A SCHEMATI C INTERPRETATION TO THE WORDS 'REASON TO BELIEVE' FAILING WHICH, WE ARE AFRAID, SECTION 147 WOULD GIVE ARBITRARY POWERS TO THE ASSESSING OFFICER TO RE - OPEN ASSESSMENTS ON THE BASIS OF 'MERE CHANGE OF OPINION', WHICH CANNOT BE PER SE REASON TO RE - OPEN. WE M UST ALSO KEEP IN MIND THE CONCEPTUAL DIFFERENCE BETWEEN POWER TO REVIEW AND POWER TO RE - ASSESS. THE ASSESSING OFFICER HAS NO POWER TO REVIEW; HE HAS THE POWER TO RE - ASSESS. BUT RE - ASSESSMENT HAS TO BE BASED ON FULFILMENT OF CERTAIN PRE - CONDITION AND IF THE CONCEPT OF 'CHANGE OF OPINION' IS REMOVED, AS CONTENDED ON BEHALF OF THE DEPARTMENT, THEN, IN THE GARB OF RE - OPENING THE ASSESSMENT, REVIEW WOULD TAKE PLACE. ONE MUST TREAT THE CONCEPT OF 'CHANGE OF OPINION' AS AN IN - BUILT TEST TO CHECK ABUSE OF POWER BY THE ASSESSING OFFICER. HENCE, AFTER 1ST APRIL, 1989, ASSESSING OFFICER HAS POWER TO RE - OPEN, PROVIDED THERE IS 'TANGIBLE MATERIAL' TO COME TO THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASONS MUST HAVE A LIVE LINK WITH THE FORMATIO N OF THE BELIEF. OUR VIEW GETS SUPPORT FROM THE CHANGES MADE TO SECTION 147 OF THE ACT, AS QUOTED HEREINABOVE. UNDER THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, PARLIAMENT NOT ONLY DELETED THE WORDS 'REASON TO BELIEVE' BUT ALSO INSERTED THE WORD 'OPINION' I N 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 PO WERS IN THE ASSESSING OFFICER. 1 0 . RESPECTFULLY FOLLOWING THE RATIO LAID DOWN IN THE ABOVE CITED CASE, WE ARE OF THE OPINION THAT EVEN IN THE PRESENT CASE, IN THE ABSENCE OF ANY FRESH MATERIAL AS WELL AS THE PROPER REASONS RECORDED, WE HAVE NO HESITATION TO QUASH THE REASSESSMENT PROCEE DINGS. THE ORDER OF LEARNED CIT(APPEALS) IS MODIFIED TO THIS EXTENT. ITA NO. 2726/DEL /2011 FOR A.Y. 2006 - 07 1 1 . THIS IS AN APPEAL FILED BY THE REVENUE PERTAINING TO THE ASSESSMENT YEAR 2006 - 07 CHALLENGING, INTER ALIA, THE FINDING OF THE LEARNED CIT(A) THAT THE PROFIT MADE ON THE SALE OF SHARES ARE INCOME FROM SHORT TERMS CAPITAL GAINS. 9 ITA NO. 2726/DEL/2011 & C.O. NO. 206/DEL/2011 1 2 . SINCE WE HAVE QUASHED THE REASSESSMENT PROCEEDINGS IN THE CROSS OBJECTIONS FILED BY THE ASSESSEE, IT IS NOT NECESSARY TO ADJUDIC ATE UPON THE MERITS OF THE ISSUES IN THE APPEAL. HENCE THE REVENUE S APPEAL IS DISMISSED. 1 3 . IN THE RESULT, THE REVENUE S APPEAL IS DISMISSED AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS ALLOWED. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 1 0 T H APRIL , 2015. S D / - S D / - ( G.C. GUPTA ) ( INTURI RAMA RAO ) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 1 0 T H APRIL , 2015. RK/ - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI