NATIONAL CONSTRUCTION CO V. JT COMMR OF INCOME TAX JCIT OSD CIRCLE GANDHIDHAM

SCA/2075/2022

AI Insights

The case involves National Construction Co., a partnership firm engaged in mining contract work, which faced reassessment under section 147 of the Income Tax Act, 1961, for the Assessment Year 2014-2015. The reassessment was initiated based on alleged unexplained credits and debits in the bank account of one of the partners, Shri Khimji Harji Patel. The petitioner contested the legality of the reassessment notice, arguing that it was issued beyond the permissible period and constituted a change of opinion rather than a discovery of new facts. The respondent, the Income Tax Department, defended the reassessment, asserting that the necessary conditions for reopening the assessment were met due to non-disclosure of material facts by the petitioner. The court, after examining the arguments and evidence, ruled in favor of the petitioner, emphasizing that the reassessment was based on previously considered issues and did not satisfy the legal requirements for reopening an assessment after four years.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 763383 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 06-09-2022
• Assessment Year: misc
• Other Referred Cases: CIT v. Kelvinator of India Ltd., Pr. CIT vs. Vaishnodevi Refoils & Solvex, CIT v. Pankaj Dyestuff Industries, Rajesh Jhaveri Stock Brokers P. Limited v. CIT, Raymond Woollen Mills Ltd v. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: NIKUNT RAVAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Certiorari; Certiorari; Change of opinion; Jurisdiction; Reassessment; Unexplained credits
• Section: 147; 148; 143(3); 197

Judgement Text

"C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 2075 of 2022 FOR APPROVAL AND SIGNATURE: HONOURABLE MR. JUSTICE N.V.ANJARIA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA ========================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ? ========================================================== NATIONAL CONSTRUCTION CO Versus JT COMMR OF INCOME TAX JCIT OSD CIRCLE GANDHIDHAM ========================================================== Appearance: MR SN DIVATIA(1378) for the Petitioner(s) No. 1 MR NIKUNT RAVAL for MRS KALPANAK RAVAL(1046) for the Respondent(s) No. 1 ========================================================== CORAM:HONOURABLE MR. JUSTICE N.V.ANJARIA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 06/09/2022 ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) Page 1 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 1.Heard learned advocate Mr. S.N. Divatia for the petitioner and learned advocate Mr. Nikunt Raval for Ms. Kalpana K. Raval for the respondent. 2.Having regard to the controversy involved in this petition, with the consent of the learned advocates for the respective parties, the petition is taken up for final hearing. 3.Rule returnable forthwith. Learned advocate Mr. Nikunt Raval waives service of notice of rule on behalf of the respondent. 4.The petitioner has preferred this petition under Article 226 of the Constitution of India seeking the following reliefs: “a) to issue a writ of certiorari or in the nature of certiorari or any other appropriate writ, orders or directions quashing and setting Page 2 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 aside the impugned notice dated 31- 03-2021 [Annexure-A] issued by the Respondent proposing to reopen the completed assessment of the Petitioner for A.Y. 2014-15. (b) to issue a writ of certiorari or in the nature of certiorari or any other appropriate writ, orders or directions quashing and setting aside the impugned order dated 20.12.2021 [Annexure-B) passed by the Respondent rejecting the objections of the Petitioner and upholding the validity of the impugned reassessment proceedings u/ s 147 of the Act for A.Y. 2014- 15. (c) to call for the records of the proceedings and look into them and be pleased to issue a writ of certiorari or any other appropriate writ, order or direction quashing the impugned notice and order. (d) Pending the hearing and final disposal of this petition to maintain status quo in the matter and ask the Respondent and its subordinates not to take any action or to do anything in furtherance and pursuance of this impugned notice. (e)To allow this Petition with cost. (f) To pass any further or other orders as the Hon'ble Court may deem proper in the interest of justice and in the circumstances of the case.” Page 3 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 5.Brief facts of the case are that the petitioner is a partnership firm duly constituted under Indian Partnership Act, 1932 and is engaged in the business of Mining Contract work involving hiring of Heavy Equipment and Machinery for excavating (including drilling in all kind of strata over burden), loading into tippers, transportation and unloading the excavated material and silt, dumping, dozing, scraping/ removal of bands, Mining contractor and letting out of Dumpers/Tippers/excavators. 5.1) The petitioner had filed its original return of income for the Assessment Year 2014-2015 on 16.09.2014 declaring loss of Rs.17,31,24,839/-. 5.2) The case of the petitioner was selected for scrutiny under CASS for Page 4 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 verifying high ratio of refund and certificate under section 197 of the Income Tax Act, 1961 (For short “the Act”). 5.3) It is the case of the petitioner that the assessment proceedings took place between 20.08.2015 and onwards during which the respondent called for various details, explanations and evidence relating to the issues under scrutiny and other items as per notices and order sheet entries. The petitioner in course of the assessment proceedings furnished all details including the ledger account of partners. 5.4) The respondent completed the regular assessment under section 143(3) of the Act on 26.10.2016 assessing the total loss of Rs. 7,36,20,230/- after making additions/ disallowances aggregating to Rs. 9,95,04,613/-. Page 5 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 5.5) The respondent thereafter issued the impugned notice on 31.03.2021 under section 148 of the Act for the Assessment Year 2014- 2015 proposing to re-assess the total income. 5.6) In response to the impugned notice the petitioner had uploaded return of income on 13.04.2021 with a copy of reply requesting to provide the copy of reasons recorded for reopening. 5.7) The respondent provided copy of reasons recorded on 15.5.2021. The reasons recorded by the Assessing Officer for reopening the assessment under section 147 of the Act read as under: “Based on your request, the reasons recorded are supplied as follows: 1. Brief Details of the Assessee: The assessee has filed its Return of Income for AY 2014-15 on 16.09.2014 declaring total loss of Rs. Page 6 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 17,31,24,839/-. Subsequently, the case was taken up for scrutiny through CASS. Thereafter, the assessment was completed u/s. 143(3) of the Income Tax Act, 1961 on 26.10.2016 determining total assessed loss at Rs. 7,36,20,230/- 2. Brief details of information collected/received by the AO: This office is in receipt of information with the case type \"High Risk CRIU/VRU Information\" on Verification Module of the Insight Portal of the Income Tax Department, uploaded by the ADIT(Inv.), Gandhidham. As per the information, Shri Khimji Harji Patel is a partner of M/s National Construction Co. and has made various debit and credit transactions with the assessee l.e. M/s National Construction Co. during the F.Y. 2013-14. Following bank accounts is reported in the information: SI No Bank Account no. Bank name Account holder name 01 0411102000002738 IDBI Bank Limited Shri Khimj Harji Patel From the departmental inquiries conducted by the O/o ADIT(Inv.). Gandhidham, it is gathered that the Shri Khimji Harji Patel has failed to explain the credits and debits in the above referred account, therefore the transactions made by Shri Khimji Harji Patel with M/s. Page 7 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 National Construction Company remain unexplained. 3. Analysis of the Information collected/received: On perusal from the information received, the details of the credits and debits made by Shri Khimji Harji Patel through a/c no. 0411102000002738 held with IDBI Limited, with M/s. National Construction Company is tabulated hereunder. FY Date Amount received in account no. 0411102000002738 from National Construction Co. (in Rs.) Amount Transferred from bank account no. 0411102000002738 to National Construction Co. (in Rs.) 2013-14 30/04/2013 13,00,000/- - 2013-14 03/06/2013 60,00,000/- - 2013-14 27/06/2013 32,00,000/- - 2013-14 31/12/2013 - 1,75,00,000/- 2013-14 22/01/2014 30,00,000/- 2013-14 05/02/2014 - 3,50,000/- 2013-14 06/02/2014 - 9,00,000/- Total 1,35,00,000 1,87,50,000/- Also, it is noted that from the search of ITD/ITBA database and e- filing account, it is found that Shri Khimji Harji Patel has filed his ITR only till A.Y. 2013-14. The assessee has not filed any return after A.Y. 2013-14. The return details of Shri Khimjl Harji Bhai Patel are tabulated below: Page 8 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 A.Y. Total Income 2012-13 Rs.2,45,420/- 2013-14 Rs.33,750/- During the enquiry process by the Investigation Wing, though summons were issued to Shri Khimji Harji Patel however he did not attend or reply to the summons issued by the ADIT(Inv.), Gandhidham. Several attempts to trace him proved futile. As Shri Khimji Harji Patel is the partner in National Construction Company, through the e- filing the address of the National Construction Company was found i.e. 1 Floor, Harsh Plaza, College Road, Main Road, Bhuj-Kutch. On enquiry, it was found that the National Construction Company is closed since a long time and nobody was there to receive this summon Therefore, in absence of Copy of computation of Income and Books of accounts and supporting documents, the credits and debits in the bank account of Shri Khimji Har Bhai Patel are treated as unexplained credits and debits. It is noted that in the bank statement of Shri Khim Harji Patet, Credits and debits of substantial amounts were found with Ms. National Construction Company. Since Shri Khimji Hari Patel has failed to explain the credits and debits, therefore the transactions made by Shri Khimi Harji Patel with respect Page 9 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 to Ms. National Construction Company remain unexplained 4. Enquiries made by the AO as sequel to Information collected/received: Necessary assessment records, e-filing portal and Insight Portal in the case of Ms. National Construction Company were perused and the information as stated in above Paragraphs was examined in light of Provisions of the Income Tax Act, 1961. 5. Findings of the AO: From the in depth analysis of the credible information received, it is proved that debit and credit transactions in the bank account of Shri Khimji Harji Patel entered into with the assessee, remain unexplained in hands of M/s. National Construction Company. Basis of forming reason to believe and details of escapement of income:- In view of the above facts, I have reasons to believe that Rs. 3,22,50,000/- is the escapement of income within the meaning of escaped assessment under section 147 of the Act for the failure on the part of the assessee to disclose all material facts fully and truly on record and this is a fit case for issue of notice u/s 148 of the Income Tax Act, 1961. This case is covered in the ambit of Explanation 2 to Section 147 of the Act. Page 10 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 7. Seventh paragraph will include escapement of income chargeable to tax in relation to any assets (including financial interest in any entity) located outside India: N/a 8. Applicability of provisions of section 147/161 to the facts of the case: In this case a return of income was filed for the year under consideration and regular assessment u/s. 143(3) was made on 26.10.2016. It is seen that 4 years from the end of the relevant assessment year have expired in this case. It is pertinent to mention here that reasons to believe that income has escaped assessment for the year under consideration have been recorded above (refer paragraph 6 above). I have carefully considered the assessment records containing the submissions made by the assessee in response to various notices issued during the assessment proceedings and have noted that the assessee has not fully and truly disclosed the facts necessary for its assessment for the year under consideration thereby necessitating reopening u/s. 147 of the Act. It is true that the assessee has filed a copy of Annual Report and Audited Profit & Loss Account and Balance Sheet along with Return of Income where various information/material were disclosed. However, the requisite full and true disclosure of all material facts necessary for assessment have not Page 11 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 been made as noted above. It is pertinent to mention here that the assessee has produced books of accounts, annual report, audited P&L A/c and balance sheet or other evidence as mentioned above, the requisite material facts as noted above in the reasons for reopening were embedded in such manner that though could have been discovered with due diligence, do not mean that true and full disclosure of facts is made by the assessee. Accordingly, provisions of Explanation 1 of section 147 of the Act are attracted. It is evident from the above discussion that in this case, the issues under consideration were never examined by the AO during the course of regular assessment. This fact is corroborated from the contents of notices issued by the AO u/s. 143(2)/142(1) and order sheet entries on various dates recorded during the 143(3) proceedings. It is important to highlight here that material facts relevant for the assessment on the issue under consideration were not filed during the course of assessment proceedings and the same may be embedded in annual report, audited P&L A/C, Balance Sheet and books of account in such a manner that it would require due diligence by the AO to extract this information. For afforested reasons, it is not a case of change of opinion by the AO. Page 12 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 In this case, more than four years have lapsed from the end of assessment year under consideration. Hence, necessary sanction to issue notice u/s: 148 of the Act, has been obtained separately from the Principal Commissioner of Income- tax-1. Rajkot as per the provisions of Section 151 of the Income Tax Act, 1961.” 5.8) The petitioner thereafter filed its objections against the reopening on 02.07.2021. 5.9) The respondent thereafter passed order dated 20.12.2021 rejecting the objections raised by the petitioner to the re-opening of assessment. 6.Learned advocate for the petitioner submitted that the impugned notice is patently illegal, bad-in-law and without jurisdiction because the condition precedent for reopening under section 147 beyond period of four years from the end of the relevant assessment year is Page 13 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 not satisfied. 6.1) Referring to section 147 of the Act, it was submitted that before reopening an assessment, the conditions specified in the said section are to be fulfilled. 6.2) It was submitted that the impugned notice has been issued on 30.03.2021 which is admittedly beyond the expiry of four years from end of Assessment Year 2014-2015 though the assessment was completed under section 143(3) on 26.10.2016. Thus, the case falls under the proviso to section 147 of the Act. It was submitted that one and the only ground on which reopening could be made by Assessing Officer under the proviso to section 147 after a period of four years from the end of the relevant assessment year is the omission or failure on part of the assessee to disclose truly and fully all material facts Page 14 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 for assessment. It was submitted that on perusal of the reasons recorded it appears that the impugned notice was issued on the ground that the debits and credits in the bank account of Shri Khimji Harji Patel were unexplained in absence of copy of computation and book/supportive documents. It was submitted that the said reason cannot empower the respondent to initiate reassessment under section 147 of the Act when the case is falling under the proviso to section 147 inasmuch as the same was not failure on part of the petitioner-firm. 6.3) It was submitted that the impugned reassessment notice as well as the re- assessment proceedings are without jurisdiction and illegal also for the reason that it was a case of change of opinion on part of the respondent with regard to the source of deposits made in the banks and Page 15 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 reopening an assessment cannot be permitted on account of change of opinion. Relying upon the judgment of the Apex Court in case of CIT v. Kelvinator of India Ltd. reported in (2010) (320 ITR 561),it was submitted that reopening of the assessment is not a jurisdiction to review an order. It was submitted that in the present case, the respondent had issued questionnaire dated 13.6.2016 and in response to this query, the petitioner had furnished reply wherein the information as sought for were supplied Therefore, the issuance of the impugned notice proceed on a mere change of opinion. 6.4) It was submitted that the respondent has formed the belief on the ground that Shri Khimji H. Patel had failed to explain the credits and debits in the account no. 2738 with IDBI Bank. It was submitted that the partnership firm is not required to explain Page 16 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 the source in respect of credits in capital account of the partner of the firm, once he is assessed to tax. It was submitted that the failure to explain the source by the partner will not amount to unexplained credit in hands of the partnership firm. It was therefore, submitted that the entire foundation of reopening is based on incorrect premises as held by this Hon'ble Court in case of Pr. CIT vs. Vaishnodevi Refoils & Solvex reported in [2018] 89 taxmann.com 80 (Gujarat). It was further submitted that the controversy involved in the present case, stands squarely covered by the decision of this Court in the case of CIT v. Pankaj Dyestuff Industries in Income Tax Reference No. 241 of 1993. 6.5) It was further submitted that there is no discrepancy in the amount transferred from Bank account no. 2738 to the capital Page 17 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 account with the petitioner firm as it was evident from the details given in objection letter and ledger account of Shri Khimji H. Patel so the belief formed by the respondent is unfounded. 6.6) Learned advocate Mr. Divatia submitted that a perusal of the order disposing the objections raised by the petitioner shows that the respondent has advanced the reasons of non-attendance in response to summons by Shri Patel, absence of computation of income, books of accounts and failure of the partner to explain credits and debits which are not tenable. 7.On the other hand, learned advocate Mr.Nikunt Raval for the respondent submitted that the petitioner has not fully and truly disclosed the facts necessary for its assessment for the year under consideration thereby Page 18 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 necessitating reopening under section 147 of the Act. 7.1) It was submitted that it is true that the petitioner had filed a copy of Annual Report and Audited Profit and Loss Account and Balance Sheet along with Return of Income where various information/material were disclosed. However, the requisite full and true disclosure of all material facts necessary for assessment had not been made as noted in the reasons for reopening. 7.2) It was submitted that the Assessing Officer analysed the available information and after analysing the information and after verifying the records available with the office, the Assessing Officer, recorded the reasons for reopening the case and issued notice under section 148 of the Act after obtaining due approval from the Pr. CIT-1, Page 19 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 Rajkot. It was further submitted that in the reasons recorded, satisfaction was clearly recorded regarding the escapement of the income chargeable to tax from assessment. 7.3) Relying upon the judgment of the Hon’ble Apex Court it was submitted that in case of Rajesh Jhaveri Stock Brokers P. Limited reported in 291 ITR 500, it was submitted that at the stage of initiation of reassessment proceedings under section 147 of the Act, it is not required to be conclusively proved that income has actually escaped assessment. The only requirement is that whether there was any relevant material on which a reasonable person can form the requisite belief that taxable income has escaped assessment. 7.4) Relying upon the case of Raymond Woollen Mills Ltd, reported in 236 ITR 34, it Page 20 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 was submitted that the Hon'ble Supreme Court has held that at the stage of initiation of reassessment, the only thing required to be seen is that whether there is any prima facie material on the basis of which, a case can be reopened. It is further held that the sufficiency or correctness of material is not a thing to be considered at this stage. 7.5) It was submitted that the respondent had issued the questionnaire to the petitioner vide letter dated 01.04.2015 where in various details were called for from the petitioner It was submitted that on perusal of the material available on record, it was found that the petitioner had submitted its details on 07.01.2016 and regarding the issue of the sources of the capital introduction, the petitioner has submitted mere statement/ chart without any evidences. However, the petitioner had not submitted any evidence to Page 21 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 substantiate its claim i.e. confirmation of accounts, copy of the bank account statements of the partner from where such capital is introduced, details/evidence of loan taken by the partner to introduce capital in firm. Hence, in the absence of the concrete evidence, the issue could not be verified due to the failure on the part of the assessee resulting in the escapement of income under section 147 of the Act. 7.6) It was submitted that as per the chart submitted by the assessee during the course of assessment proceedings under section 143(3) of the Act, it shows that that total amount of Rs.2,09,00,000/- has been transferred to National Construction Co. by Mr. K.H. Patel (partner) during the Financial Year 2012-2013, out of which a sum of Rs.2,00,00,000/- has been transferred from IDBI Bank Ltd. of Mr. K. H. Patel on Page 22 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 07.12.2012. However, as per the information available with the Department, total amount of Rs.5,88,57,000/- has been transferred to the account of National Construction Company (the petitioner) from the Bank Account No.0411102000002738 (IDBI Bank Ltd.) of Mr. K. H. Patel on different dates during the Financial Year 2012-2013. Therefore, the transactions made in the bank account of Mr. K. H. Patel (partner) with the petitioner differ from the transactions shown in the capital account of the partner, which was furnished during the course of assessment proceedings. 7.7) It was further submitted that it is the prerogative of the Assessing Officer to enquire about the sources in respect of the capital introduced so as to verify the issue of accommodation entries which are made by the layering of the multiple transactions Page 23 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 through the various accounts. By the accommodation entries, the unaccounted funds are routed through the layer of multiple accounts to take back the unaccounted funds into the books which becomes imperative for verification. 8.Considering the submissions made by learned advocates for the respective parties, it is not in dispute that the Assessment Year 2014- 2015 is sought to be reopened by the Assessing Officer beyond the expiry of four years from the end of the relevant assessment year. The assessment was completed under section 143(3) of the Act on 26.10.2016 and, therefore, as per the proviso to section 147 of the Act, only the Assessing Officer can reopen the assessment after a period of four years from the end of relevant assessment year if there is failure on part of the assessee to disclose fully and truly all Page 24 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 material facts necessary for assessment. In facts of the case, when the assessee has furnished the details with regard to the source of funds and the details of mode of receipt of the amounts which are transferred to the petitioner firm with regard to the capital introduced by the partners of the firm. The Assessing Officer has completed the regular assessment proceedings after having considered the explanation and material produced by the petitioner with regard to the credits in the capital account of the partners. Therefore, the assessee has duly discharged the onus cast upon it and if the Assessing Officer was not convinced about the creditworthiness of the partner who had made capital contribution, inquiry had to be made at the hands of the partner and not against the petitioner firm. Page 25 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 9.The controversy involved in this case is squarely covered by the decision of this Court in case of CIT v. Pankaj Dyestuff Industries in Income Tax Reference No. 241 of 1993. It is clear that the petitioner firm is not obliged to explain source of source in respect to the credits in capital account of the partners of the partnership firm once the partner is assessed to tax and failure to explain the source by the partner would not amount to unexplained credit in the hands of the partnership firm, more particularly, when such issue is already considered during the course of the regular assessment. 10. The Assessing Officer has formed reason to believe that income has escaped assessment on the ground that Shri Khimji Harji Patel has failed to explain the credit and debit account in account with IDBI Bank no. 2738. In our opinion, it would amount to change of Page 26 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 opinion as such issue is already considered by the Assessing Officer in the original assessment proceedings and therefore, there is a lack of jurisdiction to reopen the assessment which amounts to reviewing the assessment order which is already passed under section 143(3) of the Act as held by the Apex Court in case of Commissioner of Income tax v. Kelvinator of India Ltd. reported in (2010) 320 ITR 561(SC) wherein it is held as under: “2. A short question which arises for determination in this batch of civil appeals is, whether the concept of \"change of opinion\" stands obliterated with effect from 1st April, 1989, i.e., after substitution of Section 147 of the Income Tax Act, 1961 by Direct Tax Laws (Amendment) Act, 1987? xxxx 6. …………prior to Direct Tax Laws (Amendment) Act, 1987, re-opening could be done under above two conditions and fulfillment 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 Page 27 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 and only one condition has remained, 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 re-open is much wider, However, one needs to give a schematic 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 must 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 fulfillment 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…..” 11. In view of above facts and settled legal position, the contentions raised on behalf of the respondent authority as well as reliance placed on the decisions would not be applicable in facts of the case. Page 28 of 29 C/SCA/2075/2022 JUDGMENT DATED: 06/09/2022 12. For the foregoing reasons, the petition succeeds and the impugned notice dated 31.03.2021 issued under section 148 of the Act by the respondent exercising the powers to reopen the assessment for the Assessment Year 2014-2015 is illegal and hereby quashed and set aside. As a consequence, order dated 20.12.2021 passed by the Assessing Officer disposing of the objections of the petitioner against the impugned notice is also quashed and set aside. 13. Rule is made absolute to the aforesaid extent. No order as to costs. (N.V.ANJARIA, J) (BHARGAV D. KARIA, J) RAGHUNATH R NAIR Page 29 of 29 "