DCIT, , CC- XXVIII, Kolkata, Kolkata V. Binani Industries Ltd., Kolkata

ITA 817/KOL/2011

• Counselvise Citation: [2013] 119 COUNSELVISE.COM (IT) 2954 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2013
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 27-05-2011
• Court: TRIBUNAL
• Department Lawyers: A K MAHAPATRA
• Assessee Lawyers: KUNAL BISWAL AC
• Keywords: Search and seizure; Tangible material; Difference of opinion; Assessment record; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 142(1); 147; 148; 2

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE . . . . . . . . , ! /AND ' #!' , ) [BEFORE SHRI P. K. BANSAL, AM & SHRI MAHAVIR SINGH, JM] !$ !$ !$ !$ / I.T.A NO. 817/KOL/2011 #% &' #% &' #% &' #% &'/ // / ASSESSMENT YEAR: 2005-06 DEPUTY COMMISSIONER OF INCOME-TAX, VS. BINANI INDU STRIES LTD. CENTRAL CIRCLE-XXVIII, KOLKATA. (PAN: AABCB0979M ) ()* /APPELLANT ) (+,)*/ RESPONDENT ) DATE OF HEARING: 12.02.2013 DATE OF PRONOUNCEMENT: 15.03.2013 FOR THE APPELLANT: SHRI A. K. MAHAPATRA, CIT (DR) FOR THE RESPONDENT: S/SHRI VIJAY MEHTA, FCA & KUNAL BISWAL, ACA - / ORDER PER BENCH: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A), CENTRAL-1, KOLKATA IN APPEAL NO. 99/CC-XXVIII/CIT(A),C-1/08-09 DATED 09.03.2011. REASSESSMENT WAS FRAMED BY DCIT, XXVIII, KOLKATA U/S. 143(3)/147 OF THE INCOME-TAX A CT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2005-06 VIDE HIS ORDER DA TED 24.12.2009. ORIGINAL ASSESSMENT WAS FRAMED BY ACIT, CC-XXVIII, KOLKATA U/S. 143(3) OF T HE ACT VIDE ORDER DATED 23.03.2007. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) QUASHING THE REOPENING U/S. 148 OF THE ACT BY AO OF PROCEEDINGS BEING MERELY BASED ON CHANGE OF OPINION WITHIN FOUR YEARS. FOR THIS, REVENUE HAS RAISED FO LLOWING GROUND NOS. 1 AND 2: 1. WHETHER LD. CIT(A), C-1, KOLKATA HAD ERRED TO Q UASH THE NOTICE UNDER SECTION 148 OF THE I. T. ACT ON THE GROUND THAT REOPENING OF TH E PROCEEDINGS BEING MERELY BASED ON CHANGE OF OPINION ALTHOUGH THE REOPENING PROCEEDI NG WAS TAKEN BY THE ASSESSING OFFICER WITHIN 4 YEARS FROM THE END OF THE ASSESSME NT YEAR? 2. WHETHER LD. CIT(A), C-1, KOLKATA HAD ERRED IN AN NULLING THE REASSESSMENT ORDER UNDER SECTION 143(3)/147 ALTHOUGH REASSESSMENT PROC EEDING AS TAKEN BY THE ASSESSING OFFICER WAS AS PER THE INCOME TAX ACT? 3. BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE THAT THE ORIGINAL ASSESSMENT FOR THE RELEVANT AY 2005-06 WAS COMPLETED U/S. 143(3) OF THE ACT ON 23.03.2007 AFTER ISSUING NOTICES U/S. 2 ITA NO.817/K/2011 BINANI INDUSTRIES LTD. 2005-06 143(2) AND 142(1) OF THE ACT CALLING FOR DETAILS. DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS THE ASSESSEE PRODUCED BOOKS OF ACCOUNT, BANK STATEMENT AND OTHER REQUISITIONED DETAILS WHICH WERE EXAMINED BY THE AO ON TEST CHECK BASIS AND FRAMED ASSESSMENT. SUBSEQUENTLY, THE AO ISSUED NOTICE U/S. 148 OF THE ACT DATED 29.08.2008 AND VIDE LETTER DATED 23.08.2009, ASSESSEE, REQUIRED REASONS FOR REOPENIN G OF THE ASSESSMENT U/S. 148 OF THE ACT AND AO VIDE LETTER NO. ACIT.CC.XVIII/2009-10/KOL/76 DAT ED 26.08.2009 SUPPLIED THE REASONS, WHICH READ AS UNDER: ON PERUSAL OF THE ASSESSMENT RECORDS THAT THE FOLLO WING DISCREPANCIES ARE FOUND: IT IS SEEN FROM THE RECORD THAT THE ASSESSEE HAD PA ID INTEREST TO THE TUNE OF RS.8,59,78,653/- TO BINANI CEMENT LTD. NO TDS HAS BEEN DEDUCTED IN PAYM ENT OF SUCH INTEREST. AS PER SECTION 40(A)(IA) SUCH PAYMENT BECOMES NO DE DUCTIBLE ON WHICH TDS, AS REQUIRED BY I. T. ACT HAS NOT BEEN DEDUCTED. 4. THE AO FRAMED REASSESSMENT WHEREBY HE DISALLOWED INTEREST U/S. 40(A)(IA) OF THE ACT AT RS.8,59,78,653/-. FOR THIS, HE RECORDED THE FACTS THAT THERE IS NO CONTROVERSY THAT THE ASSESSEE HAS PAID INTEREST TO ITS SUBSIDIARY COMPANY BINANI CEMENTS LTD. AND NO TDS ON THIS INTEREST PAYMENT WAS DEDUCTED. HE NOTED THAT THE ASSESSEE I S LIABLE TO DEDUCT TDS ON INTEREST PAYMENT TO ITS SUBSIDIARY COMPANY BUT DID NOT DEDUCT ANY TA X. ACCORDINGLY, THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT APPLIED AND INTEREST WAS DISAL LOWED. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A). BEFORE CIT(A) ASSESSEE CHALLENGED T HE VERY REOPENING AND CIT(A) RELYING ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F CIT VS. KELVINATOR OF INDIA LTD. (2010) 320 ITR 561 (SC) HAS ANNULLED THE REASSESSMENT PROC EEDINGS VIDE PARA 3.1 TO 3.3 AS UNDER: 3.1. I HAVE CAREFULLY CONSIDERED THE SUBMISSION O F THE LD A.R . THERE IS NO DISPUTE THAT DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDING UNDER SECTION 143(3) THE DETAILS OF THE INTEREST PAID TO M/S BINANI CEMENT LTD WAS DULY FUMISHED BY THE ASSESSEE VIDE LETTER DATED 15.10.2006. FURTHER IT IS EVIDENT FROM THE ASSESSMENT ORDER DATED 23.03.2007 PASSED UNDER SECTION 143(3) OF THE ACT , THAT BOOKS OF ACCOUNTS , BANK STATEMENT AND REQUISITIONED DETAIL WERE EXAMINED BY THE A.O WITH REFERENCE TO THE DETAILS OF ACCOUNT FILED ALONG WITH THE RETURN. HEN CE IT IS EVIDENT THAT THE DISCLOSURE OF THE INTEREST PAID TO M/S. BINANI CEMENT LTD WAS VER Y MUCH ON RECORD AND THE SAME WAS DULY CONSIDERED BY THE A.O WHILE PASSING THE ASSESS MENT ORDER UNDER SECTION 143(3) OF THE ACT. THERE IS NO NEW MATERIAL IN THE POSSESSION OF THE A.O AS EVIDENT FROM THE REASON RECORDED, WHICH COULD LEAD TO THE CONCLUSION THAT THE INCOME HAS ESCAPED ASSESSMENT. NOW IT IS A SETTLE LAW THAT AO DEEMED T O HAVE APPLIED HIS MIND IF FACTS ARE ON RECORD AND REOPENING U/S 147 ON CHANGE OF OPINIO N IS NOT PERMISSIBLE EVEN WITHIN 4 YEARS. THE HONBLE SUPREME COURT C.I.T. VS. KELVINA TOR (I) LTD. - 320 ITR 651- HAS CONFIRMED THE FINDING OF THE FULL BENCH DECISION OF THE HONBLE DELHI HIGH COURT THAT ON THE BASIS OF SAME FACTS AND MATERIALS (AND NO MO RE) DISCLOSED AT THE TIME OF ORIGINAL ASSESSMENT MADE UNDER SECTION 143(3) OF THE I. T. A CT, BY MERE CHANGE OF OPINION, THE ASSESSMENT CANNOT BE RE-OPENED U/S.147 OF THE I. T. ACT, 1961. 3 ITA NO.817/K/2011 BINANI INDUSTRIES LTD. 2005-06 3.2. IN CIT VS. KELVINATOR OF INDIA LTD. 256 ITR 1 THE FULI BENCH OF THE DELHI HIGH COURT WAS CONSIDERING A CASE OF REOPENING U/S 147 W ITHIN 4 YEARS FROM THE END OF THE ASSESSMENT YEAR. THE COURT HELD THAT WHEN A REGULAR ORDER OF ASSESSMENT IS PASSED IN TERMS OF SECTION 143 (3) OF THE ACT, A PRESUMPTION CAN BE RAISED THAT SUCH AN ORDER HAS BEEN PASSED ON APPLCATION OF MIND. IT WAS HELD THA T IF IT BE HELD THAT AN ORDER WHICH HAS BEEN PASSED PURPORTEDLY WITHOUT APPLICATION OF MIND WOULD ITSELF CONFER JURISDICTION UPON THE ASSESSING OFFICER TO REOPEN T HE PROCEEDNG WITHOUT ANYTHING FURTHER, THE SAME WOULD AMOUNT TO GIVING PREMIUM T O AN AUTHORITY EXERCISING QUASI- JUDCIAL FUNCTION TO TAKE BENEFIT OF ITS OWN WRONG. IT WAS HELD THAT SECTION 147 OF THE ACT DOES NOT POSTULATE CONFERMENT OF POWER UPON THE ASS ESSING OFFICER TO INITIATE REASSESSMENT PROCEEDINGS UPON A MERE CHANGE OF OPIN ION. ON APPEAL BY THE DEPARTMENT TO THE SUPREME COURT HELD DISMISSING THE APPEAL: THOUGH THE POWER TO REOPEN UNDER THE AMENDED S. 147 IS MUCH WIDER, ONE NEEDS TO GIVE A SCHEMATIC INTERPRETATION TO THE WORDS REASON TO B ELIEVE FAILING WHICH S. 147 WOULD GIVE ARBITRARY POWERS TO THE AO TO RE- OPEN ASSESSM ENTS ON THE BASIS OF MERE CHANGE OF OPINION, WHICH CANNOT BE PER SE REASON TO RE-OPEN. ONE MUST ALSO KEEP IN MIND THE CONCEPTUAL DIFFERENCE BETWEEN POWER TO REVIEW AND P OWER TO RE-ASSESS. THE AO HAS NO POWER TO REVIEW; HE HAS THE POWER TO RE-ASSESS. BUT RE- ASSESSMENT HAS TO BE BASED ON FULFILLMENT OF CERTAIN PRE-CONDITION AND IF THE CON CEPT 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 AO. HENCE, AFTER 1.4.1989, THE AO HAS POWER TO RE-OPEN, PROVIDED THERE IS TANGIBLE MA TERIAL TO COME TO THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASONS MUST HAVE A LIVE LINK WITH THE FORMATION OF THE BELIEF. THIS IS SUPPORTED BY C IRCULAR NO.549 DATED 31.10.1989 WHICH CLARIFIED THAT THE WORDS REASON TO BELIEVE DI D NOT MEAN A CHANGE OF OPINION. 3.3. CONSIDERING THE SUBMISSION OF THE ASSESSEE AN D THE FACT OF THE CASE AS DISCUSSED ABOVE, IT IS HELD THAT THAT THE CASE WAS REOPENED BY THE A.O ON MERE CHANGE OF OPINION THAT T.D.S PROVISION WILL BE APPLICABLE ON THE AMOUNT REIMBURSED TO BINANI CEMENT LTD. AGAINST THE INTEREST PAID TO THE BANK. IT IS A SETTLE ISSUE THAT THE REOPENING OF THE PROCEEDING, BEING MERELY BASED ON CHANGE OF OPINION SHOULD BE CONSIDERED AS INVALID AND ILLEGAL AND SHOULD BE CANCELLED. ACCOR DINGLY THE NOTICE ISSUED UNDER SECTION 148 OF THE INCOME TAX ACT IS QUASHED AND AC CORDINGLY THE ORDER PASSED UNDER SECTION 147/143(3) IS ANNULLED. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. 5. BEFORE US, LD. CIT(DR) SHRI A. K. MAHAPATRA HEAV ILY RELIED ON THE DECISION OF HONBLE DELHI HIGH COURT FULL BENCH IN THE CASE OF CIT VS. USHA INTERNATIONAL LTD. (2012) 348 ITR 485 (DEL), WHEREIN IT HAS BEEN HELD AS UNDER: DISTINCTION BTWEEN DISCLOSURE/DECLARATION OF MATE RIAL FACTS MADE BY THE ASSESSEE AND THE EFFECT THEREOF AND THE PRINCIPLE OF CHANGE OF O PINION IS APPARENT AND RECOGNIZED. FAILURE TO MAKE FULL AND TRUE DISCLOSURE OF MATERIA L FACTS IS A PRECONDITION WHICH SHOULD BE SATISFIED IF THE REOPENING IS AFTER FOUR YEARS OF THE END OF THE ASSESSMENT YEAR. THE EXPLANATION STIPULATES THAT MERE PRODUCTION OF BOOKS OF ACCOUNT AND OTHER DOCUMENTS, FROM WHICH THE ASSESSING OFFICER COULD H AVE WITH DUE DILIGENCE INFERRED FACTS DOES NOT AMOUNT TO FULL AND TRUE DISCLOSURE. THUS, IN CASES OF REOPENING AFTER FOUR YEARS AS PER THE PROVISO, CONDUCT OF THE ASSESSEE A ND DISCLOSURES MADE BY HIM ARE RELEVANT. HOWEVER, WHEN THE PROVISO IS NOT APPLICAB LE, THE SAID PRECONDITION IS NOT APPLICABLE. THIS ADDITIONAL REQUIREMENT IS NOT TO B E SATISFIED WHEN REASSESSMENT 4 ITA NO.817/K/2011 BINANI INDUSTRIES LTD. 2005-06 PROCEEDINGS ARE INITIATED WITHIN FOUR YEARS OF THE END OF THE ASSESSMENT YEAR. THE SEQUITUR IS THAT WHEN THE PRO VISO DOES NOT APPLY, THE REASSESSMENT PROCEEDINGS CANNOT BE DECLARED INVALID ON THE GROUND THAT THE FULL AND TRUE DISCLOSURE OF MATERIAL FACTS WAS MADE. IN SUCH CASES, REASSESSMENT PROCEEDINGS CAN B E DECLARED INVALID WHEN THERE IS A CHANGE OF OPINION. AS A MATTER OF ABUNDANT CAUTION WE CLARIFY THAT FAILURE TO STATE TRUE AND CORRECT FACTS CAN VITIATE AND MAKE THE PRINCIPL E OF CHANGE OF OPINION INAPPLICABLE. THIS DOES NOT REQUIRE REFERENCE TO AND THE PROVISO IS NOT NVOKED. THE DIFFERENCE S THIS; WHEN THE PROVISO APPLIES THE CONDITION STATED THERE IN MUST BE SATISFIED AND IN OTHER CASES IT IS NOT A PREREQUISITE OR CONDITION PRECEDE NT BUT THE DEFENCE/PLEA OF CHANGE OF OPINION SHALL NOT BE AVAILABLE AND WILL BE REJECTED . THUS, IF A SUBJECT-MATTER, ENTRY OR CLAIM/DEDUCTION IS NOT EXAMINED BY AN ASSESSING OFFICER, IT CANNOT BE PRESUMED THAT HE MUST HAVE EX AMINED THE CLAIM/DEDUCTION OR THE ENTRY, AND, THEREFORE, IT IS THE CASE OF CHANGE OF OPINION. WHEN AT THE FIRST INSTANCE, N THE ORIGINAL ASSESSMENT PROCEEDINGS, NO OPINION IS FORMED, THE PRINCIPLE OF CHANGE OF OPINON CANNOT AND DOES NOT APPLY. THERE IS A DIFFE RENCE BETWEEN CHANGE OF OPINION AND FAILURE OR OMISSION OF THE ASSESSING OFFICER TO FORM AN OPINION ON A SUBJECT-MATTER, ENTRY, CLAIM, DEDUCTION. WHEN THE ASSESSING OFFICER FAILS TO EXAMINE A SUBJECT-MATTER, ENTRY, CLAIM OR DEDUCTION, HE FORMS NO OPINION. IT IS A CASE OF NO OPINION. 6. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE TOOK US TO THE DETAILS FILED BEFORE THE AO DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEED INGS I.E. INTEREST DETAILS FILED VIDE LETTER DATED 15.10.2006, WHEREIN THE COMPLETE DISCLOSURE O F INFORMATION I.E. INTEREST PAID TO BINANI CEMENT LTD. AT RS.8,59,78,653/- IS MADE. FURTHER, VIDE LETTER DATED 01.11.2006, THE AO WAS INFORMED AS UNDER: DETAILS OF FINANCIAL RESTRUCTURING SPECIFYING NAME OF THE INSTITUTION INVOLVED QUANTUM OF LOAN AND ACCRUED INTEREST TRANSFERRED TO BCL AND OTHERS. IN VIEW OF THIS, LD. COUNSEL FOR THE ASSESSEE HEAVI LY RELIED ON THE ORDER OF CIT(A) AS WELL AS THE CASE LAW OF HONBLE SUPREME COURT IN THE CASE OF KE LVINATOR OF INDIA LTD. (SUPRA). HE ALSO RELIED ON VARIOUS CASE LAWS OF DIFFERENT HIGH COURT S INCLUDING THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF INDIA STEAMSHIP CO. LTD. VS. JCIT (2005) 275 ITR 155 (CAL). HE ALSO RELIED ON THE DECISION OF HONBLE DELHI HIGH C OURT IN ITA NO.555 OF 2012 DATED 12.12.2012 IN THE CASE OF CIT VS. ORIENT CRAFT LTD. 7. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. THE ABOVE STATED FACTS ARE UNDISPUTED. EVEN FROM T HE REASONS RECORDED THE AO HAS NOTED AND ALSO REACHED THE BELIEF THAT INCOME HAS ESCAPED ASS ESSMENT ON PERUSAL OF THE ASSESSMENT RECORDS THAT THE FOLLOWING DISCREPANCIES ARE FOUND , AS THE ASSESSMENT WAS FRAMED BY THE AO ORIGINALLY U/S. 143(3) OF THE ACT, THEREBY SCRUTINI ZING THE ENTIRE ISSUE VIDE ISSUING QUESTIONNAIRE 5 ITA NO.817/K/2011 BINANI INDUSTRIES LTD. 2005-06 ON THE DETAILS OF INTEREST PAID TO BCL AT RS.8,59,7 8,653/-. WE FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF KELVINATOR OF INDIA LTD. (SUPR A) HAS OBSERVED AS UNDER: HOWEVER, ONE NEEDS TO GIVE A SCHEMATIC INTERPRETA TION TO THE WORDS 'REASON TO BELIEVE' FAILING WHICH, WE ARE AFRAID, SECTION 147 WOULD GIVE ARBITRARY POWERS TO THE ASSESSING OFFICER TO REOPEN ASSESSMENTS ON THE BASI S OF 'MERE CHANGE OF OPINION', WHICH CANNOT BE PER SE REASON TO REOPEN. WE MUST AL SO KEEP IN MIND THE CONCEPTUAL DIFFERENCE BETWEEN POWER TO REVIEW AND POWER TO REA SSESS. THE ASSESSING OFFICER HAS NO POWER TO REVIEW; HE HAS THE POWER TO REASSESS. BUT REASSESSMENT HAS TO BE BASED ON FULFILLMENT OF CERTAIN PRECONDITIONS AND IF THE CON CEPT OF 'CHANGE OF OPINION' IS REMOVED, AS CONTENDED ON BEHALF OF THE DEPARTMENT, THEN, IN THE GARB OF REOPENING 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, THE ASSESSING OFFICER HAS POWER TO REO PEN, PROVIDED THERE IS 'TANGIBLE MATERIAL' TO COME TO THE CONCLUSION THAT THERE IS E SCAPEMENT OF INCOME FROM ASSESSMENT. REASONS MUST HAVE A LIVE LINK WITH THE FORMATION 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 N OT 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 AGAIN ST OMISSION OF THE WORDS 'REASON TO BELIEVE', PARLIAMENT REINTRODUCED THE SAID EXPRESSI ON AND DELETED THE WORD 'OPINION' ON THE GROUND THAT IT WOULD VEST ARBITRARY POWERS I N THE ASSESSING OFFICER. WE QUOTE HEREIN BELOW THE RELEVANT PORTION OF CIRCULAR NO. 5 49 DATED OCTOBER 31, 1989 ([1990] 182 ITR (ST.) 1, 29), WHICH READS AS FOLLOWS: '7.2 AMENDMENT MADE BY THE AMENDING ACT, 1989, TO R EINTRODUCE THE EXPRESSION `REASON TO BELIEVE' IN SECTION 147.-A NUMBER OF REP RESENTATIONS 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 POIN TED 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 SEC TION 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 AMEN DED 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 PROVISION S OF THE NEW SECTION 147, HOWEVER, REMAIN THE SAME.' FURTHER, IN THIS JUDGMENT HONBLE SUPREME COURT HAS ALSO OBSERVED THAT AFTER 01.04.1989, THE AO HAS POWER TO REOPEN THE ASSESSMENT PROVIDED THER E IS TANGIBLE MATERIAL TO COME TO THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME. 8. IN THE PRESENT CASE BEFORE US, THE ENTIRE DETAIL S OF INTEREST PAID TO BINANI CEMENT LTD. WAS AVAILABLE WITH THE AO AT THE TIME OF ORIGINAL A SSESSMENT AND THE PRESENT AO, REOPENING THE ASSESSMENT, HAS RECORDED THE REASONS FROM THE PERUS AL OF ASSESSMENT RECORDS AND ALSO FOUND DISCREPANCY AND NOT ESCAPEMENT OF INCOME, WHICH IS THE MANDATE OF SECTION 147 OF THE ACT. EVEN HONBLE DELHI HIGH COURT IN THE CASE OF ORIENT CRAFT LTD. (SUPRA) HAS FINALLY HELD AS UNDER: 6 ITA NO.817/K/2011 BINANI INDUSTRIES LTD. 2005-06 14. IN THE PRESENT CASE THE REASONS DISCLOSE THAT THE ASSESSING OFFICER REACHED THE BELIEF THAT THERE WAS ESCAPEMENT OF INCOME ON GOIN G THROUGH THE RETURN OF INCOME FILED BY THE ASSESSEE AFTER HE ACCEPTED THE RETURN UNDER SECTION 143(1) WITHOUT SCRUTINY, AND NOTHING MORE. THIS IS NOTHING BUT A REVIEW OF THE EARLIER PROCEEDINGS AND AN ABUSE OF POWER BY THE ASSESSING OFFICER, BOTH STRON GLY DEPRECATED BY THE SUPREME COURT IN CIT VS. KELVINATOR (SUPRA). THE REASONS R ECORDED BY THE ASSESSING OFFICER IN THE PRESENT CASE DO CONFIRM OUR APPREHENSION ABOUT THE HARM THAT A LESS STRICT INTERPRETATION OF THE WORDS REASON TO BELIEVE VIS --VIS AN INTIMATION ISSUED UNDER SECTION 143(1) CAN CAUSE TO THE TAX REGIME. THERE IS NO WHISPER IN THE REASONS RECORDED, OF ANY TANGIBLE MATERIAL WHICH CAME TO TH E POSSESSION OF THE ASSESSING OFFICER SUBSEQUENT TO THE ISSUE OF THE INTIMATION. IT REFL ECTS AN ARBITRARY EXERCISE OF THE POWER CONFERRED UNDER SECTION 147. SIMILARLY, IN THE PRESENT CASE ALSO THERE IS NO WHI SPER IN THE REASONS RECORDED OF ANY TANGIBLE MATERIAL WHICH HAS COME TO THE POSSESSION OF AO SUB SEQUENT TO THE ASSESSMENT. FOR THESE REASONS, WE ARE OF THE VIEW THAT THE AO HAS CHANGED HIS OPINION WHILE REOPENING THE ASSESSMENT AND WE QUASH THE SAME. 9. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 10. ORDER PRONOUNCED IN THE OPEN COURT ON 15.03.201 3. SD/- SD/- . . . . . . . . , ' ' ' ' #!' #!' #!' #!' , (P. K. BANSAL) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( . . . .) )) ) DATED: 15TH MARCH, 2013 /0 #12 #3 JD.(SR.P.S.) 7 ITA NO.817/K/2011 BINANI INDUSTRIES LTD. 2005-06 - 4 +##5 65&7- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT DCIT, CC-XXVIII, KOLKATA. 2 +,)* / RESPONDENT BINANI INDUSTRIES LTD., 37/2, CHINAR PARK, NEW TOWN RAJARHAT MAIN ROAD, P.O. HATIARA, NORTH 24 PARGANAS , KOLKATA-700 157. . 3 . #- ( )/ THE CIT(A), KOLKATA 4. 5. #- / CIT KOLKATA 5 <#= +# / DR, KOLKATA BENCHES, KOLKATA ,5 +#/ TRUE COPY, ->/ BY ORDER, ' !2 /ASSTT. REGISTRAR .