Gujarat H.C : Where revised computation submitted by assessee during assessment was found to be correct and accepted as such by Assessing Officer, reassessment, on ground that such recomputation having been submitted beyond time specified in section 139(5)

High Court Of Gujarat

Rotary Club of Ahmedabad vs. ACIT

Assessment Year : 2006-07

Section : 147

Ms. Harsha Devani And H.B. Antani, JJ.

SCA No. 13939 Of 2010

January  31, 2011

JUDGMENT
 
Ms. Harsha Devani, J. – Rule. Mrs. M. M. Bhatt, learned senior standing counsel waives service of rule on behalf of the respondent. Having regard to the controversy involved in the present case, the petition was taken up for hearing and final disposal.

2. By this petition under article 226 of the Constitution of India, the petitioner, an association of persons, has challenged the notice dated July 28, 2010, issued by the respondent under section 148 of the Income-tax Act, 1961 (the Act), seeking to reopen the petitioner’s assessment for the assessment year 2006-07.

3. The facts of the case as appearing in the petition are that the petitioner filed its return of income on July 28, 2006 declaring total income of Rs.1,34,47,493 which included capital gains of Rs. 1,30,21,230. The return was selected for scrutiny assessment. During the course of scrutiny assessment, in response to the notice dated October 17, 2008 issued under section 142(1) of the Act, the petitioner filed a revised statement of total income at Rs. 99,45,288 which included capital gains of Rs. 95,14,653 as against the originally declared capital gains of Rs. 1,30,21,230. Assessment came to be framed, vide order dated December 3, 2008 under section 143(3) of the Act accepting the revised statement submitted by the petitioner and determining the total income of the petitioner at Rs. 99,45,288.

4. Thereafter, vide the impugned notice under section 148 of the Act issued on July 28, 2010, the respondent sought to reopen the assessment for the year under consideration. In response thereto, the petitioner filed return of income and requested for supply of reasons for proposed reopening. Upon receipt of the reasons, the petitioner, vide letter dated September 22, 2010, raised objections to the reopening both on facts as well as in law and submitted that since the very reopening is without jurisdiction, no further action be taken in this regard. It was pointed out that in any case, the issue of quantification of capital gains had been gone into at the stage of the original assessment proceedings and there was no new information or fresh evidence which had come into the possession of the respondent which was not there when the original assessment order was framed. Vide communication dated October 6, 2010, the objections raised by the petitioner came to be rejected by the respondent. It is at this stage that the petitioner has approached this court challenging the impugned notice.

5. Mr. Tushar P. Hemani, learned advocate for the petitioner, submitted that the respondent seeks to reopen the assessment based on the very same material on which the earlier assessment under section 143(3) of the Act had been made, without there being any tangible material on the basis of which he could have formed the belief that income has escaped assessment for the year under consideration. It was submitted that thus the proceedings under section 147 of the Act are sought to be initiated on a mere change of opinion and as such the assumption of jurisdiction by the respondent-Assessing Officer is invalid. The learned advocate invited attention to the reasons recorded for reopening the assessment to submit that the only ground on which the assessment is sought to be reopened is that the petitioner was not entitled to file a revised statement beyond the statutory period under section 139(5) of the Act. Attention was also invited to the notice dated October 17, 2008 issued under section 142(1) of the Act whereby the Assessing Officer had called for various particulars from the petitioner with regard to the details of lands on which capital gains of Rs.1,30,21,230 had arisen, etc. Referring to the communication dated November 18, 2008 given in response to the notice under section 142(1) of the Act, it was pointed out that in the said statement the petitioner had pointed out that there was some mistake in the working of long-term capital gains and as such a revised computation of total income was attached therewith. Referring to the assessment order framed under section 143(3) of the Act, it was pointed out that the only issue discussed therein was with regard to capital gains on sale of land which had been submitted by the petitioner and accepted by the Assessing Officer. It was, accordingly, submitted that as the then Assessing Officer had formed an opinion with regard to the very issue on the basis of which assessment is now sought to be reopened by the Assessing Officer, it is not open for the respondent now to change that opinion and take a different stand based on the very same set of facts and circumstances. It was contended that the petitioner had not filed a revised return and had only submitted a revised statement pointing out an arithmetical mistake in computation. According to the learned advocate, the Assessing Officer had issued a questionnaire calling for certain details pursuant to which the petitioner was duty bound to furnish correct details, hence, as there was a mistake in the computation while filing the original return, the petitioner had furnished the correct details in response thereto. It was argued that “assessment” means “determination of correct income” and on facts, there is no escapement of income. It was submitted that even if the case of the Revenue were to be accepted, namely, that the Assessing Officer should not have accepted the revised computation, at best the assessment order may be said to be erroneous, for which the remedy available to the respondent is under section 263 of the Act, however, on a mere change of opinion without any new material having come in the possession of the Assessing Officer it is not permissible for the Assessing Officer to reopen the assessment. Placing reliance on the decision of the Supreme Court in the case of CIT v. Kelvinator of India Ltd. [2010] 320 ITR 561 (SC), it was urged that the reopening of assessment by issuance of the impugned notice under section 148 of the Act is nothing but a change of opinion and as such the notice being without jurisdiction deserves to be quashed and set aside.

6. The petition was strongly resisted by Mr. M. R. Bhatt, learned senior advocate appearing for the respondent. The attention of the court was invited to the fact that initially the return of income came to be filed under section 139(1) of the Act at a total income of Rs. 1,34,47,493, and that, subsequently, a revised statement had been filed computing the income at Rs. 99,45,288. Referring to the provisions of section 139(5) of the Act, it was submitted that as per the provisions of the said section if after furnishing the return of income, any omission or mistake is found then the revised return can be filed at any time before the expiry of one year from the end of the relevant assessment year or before completion of assessment, whichever is earlier. It was submitted that in case the petitioner had made a mistake while filing the original return, it was required to file a revised return of income. However, no corrections could be made on the basis of a revised statement submitted beyond the time limit stipulated under section 139(5) of the Act. According to the learned counsel, in view of the decision of the Supreme Court in the case of Goetze (India) Ltd. v. CIT [2006] 284 ITR 323 (SC) the Assessing Officer had no power to entertain any claim made otherwise then by way of a revised return. It was urged that in the circumstances, the petitioner was not entitled to computation of its income on the basis of the revised statement filed by it and as such the Assessing Officer, in view of the aforesaid decision of the Supreme Court, which would constitute tangible material for the purpose of reopening of the assessment, had reason to believe that income had escaped assessment. Inviting attention to the original assessment order, it was submitted that the same does not reflect any application of mind as regards the issue in question. What had been claimed by the petitioner has been accepted. No opinion has been formed as regards the admissibility of the revised computation. It was submitted that income in the return filed under section 139(1) of the Act bears the character of self-assessment of income and that in the facts of the present case, the assessed income has gone below the self-assessed income. It was further submitted that a mere noting of facts cannot be equated with formation of an opinion so as to constitute change of opinion. It was contended that as to whether the revised return could have been accepted has not been gone into by the Assessing Officer and as such there was no application of mind in this regard so as to form an opinion and as such the reopening, which is within a period of 4 years from the end of the relevant assessment year, is well within the jurisdiction of the Assessing Officer. In support of his submissions the learned counsel placed reliance upon a decision of the apex court in the case of Malegaon Electricity Co. P. Ltd. v. CIT [1970] 78 ITR 466 (SC) wherein in the facts of the said case the price realised at the sale in excess of the written down value of the assets sold, had not been included as profits in the return submitted by the assessee. The assessee had not shown either in its return or in any of the documents submitted to the Income-tax Officer, the written down value of the assets sold. Such failure on the part of the assessee was held to be a failure to disclose fully and truly all material facts necessary for its assessment. The court held that from the cryptic statement of the Income-tax Officer in the original assessment order that “no adjustment is necessary” the Tribunal was not justified in drawing the inference that the Income-tax Officer had considered all the relevant facts. Inviting attention to the assessment order it was submitted that in the facts of the present case also the Assessing Officer has made a cryptic statement to the effect that the revised statement has been accepted and the case is assessed at Rs.99,45,288. Reliance was also placed upon the decision of the Supreme Court in the case of A. L. A. Firm v. CIT [1991] 189 ITR 285 (SC) wherein the court observed thus (page 299) :

“We think there is force in the argument on behalf of the assessee that, in the face of all the details and statement placed before the Income-tax Officer at the time of the original assessment, it is difficult to take the view that the Income-tax Officer had not at all applied his mind to the question whether the surplus is taxable or not. It is true that the return was filed and the assessment was completed on the same date. Nevertheless, it is opposed to normal human conduct that an officer would complete the assessment without looking at the material placed before him. It is not as if the assessment record contained a large number of documents or the case raised complicated issues rendering it probable that the Income-tax Officer had missed these facts. It is a case where there is only one contention raised before the Income-tax Officer and it is, we think, impossible to hold that the Income-tax Officer did not at all look at the return filed by the assessee or the statements accompanying it. The more reasonable view to take would, in our opinion, be that the Income-tax Officer looked at the facts and accepted the assessee’s contention that the surplus was not taxable. But, in doing so, he obviously missed to take note of the law laid down in G. R. Ramachari and Co. [1961] 41 ITR 142 (Mad) which there is nothing to show, had been brought to his notice. When he subsequently became aware of the decision, he initiated proceedings under section 147(b). The material which constituted information and on the basis of which the assessment was reopened was the decision in G. R. Ramachari and Co. [1961] 41 ITR 142 (Mad). This material was not considered at the time of the original assessment. Though it was a decision of 1961 and the Income-tax Officer could have known of it had he been diligent, the obvious fact is that he was not aware of the existence of that decision then and, when he came to know about it, he rightly initiated proceedings for reassessment.

We may point out that the position here is more favourable to the Revenue than that which prevailed in the Madras cases referred to earlier. There, what the Income-tax Officer had missed earlier was the true purport of the relevant statutory provisions. It seems somewhat difficult to believe that the Income-tax Officer could have failed to read properly the statutory provisions applicable directly to the facts before him (though that is what seems to have happened). Perhaps an equally plausible view on the facts could have been taken that he had considered them and decided, in one case, not to apply them and, in the other, on a wrong construction thereof. In the present case, on the other hand, the material on which the Income-tax Officer has taken action is a judicial decision. This had been pronounced just a few months earlier to the original assessment and it is not difficult to see that the Income-tax Officer must have missed it or else he could not have completed the assessment as he did. Indeed it has not been suggested that he was aware of it and yet chose not to apply it. It is, therefore, much easier to see that the initiation of reassessment proceedings here is based on definite material not considered at the time of the original assessment.”

7. It was submitted that the facts of the present case are similar to the facts of the aforesaid case, inasmuch while framing the original assessment it is apparent that the then Assessing Officer has not taken note of the decision in the case of Goetze (India) Ltd. v. CIT [2006] 284 ITR 323 (SC) as well as the decisions referred to in the order recording reasons and as such initiation of reassessment proceedings by placing reliance on the said decisions is based on definite material not considered at the time of original assessment. Referring to the decision of the Supreme Court in the case of CIT v. Kelvinator of India Ltd. [2010] 320 ITR 561 (SC), it was submitted that the said decision holds that it is not open to the Assessing Officer to reopen the assessment on the basis of mere change of opinion. However, in the facts of the present case, since no opinion has been formed at the first instance, the question of change of opinion would not arise.

8. In rejoinder, Mr. Hemani, learned advocate for the petitioner submitted that the only issue which finds place in the order of the Assessing Officer is the issue which is sought to be reopened by the Assessing Officer. To say that the Assessing Officer had not applied its mind would amount to giving premium to wrong doing. It was submitted that the benefit of doubt cannot be given to the Revenue since this was the only item in the assessment order. As regards the contention that formation of opinion was not reflected in the assessment order, it was submitted that under the Income-tax Act, one is not concerned with the opinion. The conclusion arrived at by the Assessing Officer is the opinion. It was submitted that in the light of the decision of the Supreme Court in the case of CIT v. Kelvinator of India Ltd. [2010] 320 ITR 561 (SC) there has to be tangible material which has to be from an outside source for the purpose of forming an opinion regarding escapement of assessment. In the facts and circumstances of the present case, there is no tangible material on the basis of which the Assessing Officer could have formed an opinion that income has escaped assessment and the assumption of jurisdiction by the Assessing Officer is therefore invalid and as such the impugned notice being unsustainable in law is required to be quashed and set aside.

9. Various other decisions of the Supreme Court as well as High Courts have been cited by the learned advocates for the respective parties, however, with a view to avoid prolix, reference is not made to all the decisions.

10. The assessment year is 2006-07 and notice under section 148 of the Act has been issued on July 28, 2010, that is, within a period of four years from the expiry of the relevant assessment year, and as such, the only prerequisite for the purpose of assuming jurisdiction under section 147 of the Act, is that the Assessing Officer should have reason to believe that income has escaped assessment for the assessment year under consideration.

11. The Supreme Court in the case of Phool Chand Bajrang Lal v. ITO [1993] 203 ITR 456 (SC) has held thus (page 477) :

“From a combined review of the judgments of this court, it follows that an Income-tax Officer acquires jurisdiction to reopen an assessment under section 147(a) read with section 148 of the Income-tax Act, 1961 only if on the basis of specific, reliable and relevant information coming to his possession subsequently, he has reasons which he must record, to believe that, by reason of omission or failure on the part of the assessee to make a true and full disclosure of all material facts necessary for his assessment during the concluded assessment proceedings, any part of his income, profit or gains chargeable to income-tax has escaped assessment. He may start reassessment proceedings either because some fresh facts come to light which were not previously disclosed or some information with regard to the facts previously disclosed comes into his possession which tends to expose the untruthfulness of those facts. In such situations, it is not a case of mere change of opinion or the drawing of a different inference from the same facts as were earlier available but acting on fresh information. Since, the belief is that of the Income-tax Officer, the sufficiency of reasons for forming the belief is not for the court to judge but it is open to an assessee to establish that there in fact existed no belief or that the belief was not at all a bona fide one or was based on vague, irrelevant and non-specific information. To that limited extent, the court may look into the conclusion arrived at by the Income-tax Officer and examine whether there was any material available on the record from which the requisite belief could be formed by the Income-tax Officer and further whether that material had any rational connection or a live link for the formation of the requisite belief. It would be immaterial whether the Income-tax Officer, at the time of making the original assessment, could or could not have found by further enquiry or investigation, whether the transaction was genuine or not if, on the basis of subsequent information, the Income-tax Officer arrives at a conclusion, after satisfying the twin conditions prescribed in section 147(a) of the Act, that the assessee had not made a full and true disclosure of the material facts at the time of original assessment and, therefore, income chargeable to tax had escaped assessment.”

12. The Supreme Court in the case of CIT v. Kelvinator of India Ltd. [2010] 320 ITR 561 (SC) has held thus (page 564) :

“On going through the changes, quoted above, made to section 147 of the Act, we find that, prior to the Direct Tax Laws (Amendment) Act, 1987, reopening could be done under the above 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 April 1, 1989), they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post April 1, 1989, power to reopen 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 reopen assessments on the basis of ‘mere change of opinion’, which cannot be per se reason to reopen. We must also keep in mind the conceptual difference between power to review and power to reassess. The Assessing Officer has no power to review ; he has the power to reassess. But reassessment has to be based on fulfilment of certain precondition and if the concept 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 April 1, 1989, the Assessing Officer has power to reopen, 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 formation of the belief.”

13. Thus, the following principles emerge from the aforesaid decisions of the Supreme Court, viz., the sufficiency of reasons for forming the belief, is not for the court to judge but it is open to an assessee to establish that there in fact existed no belief or that the belief was not at all a bona fide one or was based on vague, irrelevant and non-specific information. To that extent the court may look into the conclusion arrived at by the Assessing Officer and examine whether there was any material available on the record from which the requisite belief could be formed by the Assessing Officer and further whether that material had any rational connection or a live link for the formation of the requisite belief. The Assessing Officer has no power to review ; he has power to reassess. But the reassessment must be based on fulfilment of certain pre-conditions. The concept of “change of opinion” must be treated as an in-built test to check abuse of power by the Assessing Officer. The Assessing Officer has power to reopen, provided there is “tangible material” to come to the conclusion that there is escapement of income from assessment.

14. This High Court in the case of VXL India Ltd. v. Asst. CIT [1995] 215 ITR 295 (Guj) has held thus (page 297) :

“The essential requirement for initiating proceedings under section 148 of the Act is that the Assessing Officer must have reason to believe that any income chargeable to tax has escaped assessment for any assessment year. Explanation 2 to section 147 of the Act as appended to newly substituted section 147 makes certain provisions where, in certain circumstances, the income is deemed to have escaped assessment giving jurisdiction to the Assessing Officer to act under the said provision. Another requirement which is necessary for assuming jurisdiction is that the Assessing Officer shall record his reasons for issuing notice. This requirement necessarily postulates that before the Assessing Officer is satisfied to act under the aforesaid provisions, he must put in writing as to why in his opinion or why he holds the belief that income has escaped assessment. ‘Why’ for holding such belief must be reflected from the record of reasons made by the Assessing Officer. In a case where the Assessing Officer holds the opinion that because of excessive loss or depreciation allowance the income has escaped assessment, the reasons recorded by the Assessing Officer must disclose by what process of reasoning he holds such belief that excessive loss or depreciation allowance has been computed in the original assessment. Merely saying that excessive loss or depreciation allowance has been computed without disclosing reasons which led the assessing authority to hold such belief, in our opinion, does not confer jurisdiction on the Assessing Officer to take action under sections 147 and 148 of the Act. We are also of the opinion that, howsoever wide the scope of taking action under section 148 of the Act, it does not confer jurisdiction on change of opinion on the interpretation of a particular provision earlier adopted by the assessing authority. For coming to the conclusion whether there has been excessive loss or depreciation allowance or there has been under assessment or assessment at a lower rate or for applying other provisions of Explanation 2, it must be material and it should have nexus for holding such opinion contrary to what has been expressed earlier. The scope of section 147 of the Act is not for reviewing its earlier order suo motu irrespective of there being any material to come to a different conclusion apart from just having second thoughts about the inferences drawn earlier.”

15. The facts of the present case are required to be examined in the light of the aforesaid principles. For the purpose of examining the validity of the proceedings under section 147, it would be necessary to refer to the reasons recorded for reopening the assessment. The reasons recorded by the Assessing Officer for reopening the assessment are as under :

“In this case, the return for the assessment year 2006-07 was filed by the assessee declaring total income of Rs. 1,34,47,493. The same was selected for scrutiny and accordingly assessment order under section 143(3) dated December 3, 2008 was passed whereby the total income was determined at Rs. 99,45,288.

It has been found that during the assessee has furnished revised statement of income on November 18, 2008 in which the capital gains on transfer of property situated at City Survey No. 3445/2 alias 3445/B in Shahpur Ward No. 2 Registration District and Sub-District, in the revised statement of income capital gains was worked out to Rs.99,45,288 as against Rs. 1,35,47,493 shown in the original return of income. As per the provision under section 139(5) of the Income-tax Act, if after furnishing a return, any omission or wrong statement is discovered, a revised return can be filed at any time before the expiry of one year from the end of the relevant assessment year, or before the completion of the assessment, whichever is earlier. Further, as per the decision of Gopaldas Parshottamdas v. CIT [1941] 9 ITR 130 (All) and Waman Padmanabh Dande v. CIT [1952] 22 ITR 339 (Nagpur) an application or letter to the Assessing Officer for correcting or making amendments in original return already filed would not constitute revised return.

Therefore, the assessee is not entitled to file a revise statement beyond the statutory period allowed under section 139(5) of the Act.

In view of the above, I have reason to believe that income of Rs.35,06,575 (1,34,47,493 – 95,14,653) chargeable to tax under head capital gain has escaped assessment within the meaning of section 147 of the Act. I am, therefore, satisfied that it is a fit case for reopening the assessment under section 147 read with section 148 of the Act.”

16. On a plain reading of the reasons recorded, it appears that it is the case of the Assessing Officer that as per the provisions of section 139(5) of the Act, if any omission or wrong statement is discovered after furnishing return, a revised return can be filed at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. That the petitioner had filed a revised statement on November 18, 2008 which was beyond the statutory period of limitation and as such the petitioner was not entitled to file such a revised statement and as such, he had reason to believe that the income being the difference between total income shown in the original return of income and what was shown in the revised computation of income has escaped assessment within the meaning of section 147 of the Act. Reliance is placed upon the decisions of the Allahabad High Court in the case of Gopaldas Parshottamdas v. CIT [1941] 9 ITR 130 (All) and the Nagpur High Court in the case of Waman Padmanabh Dande v. CIT [1952] 22 ITR 339 (Nagpur) for the proposition that an application or letter to the Assessing Officer for correcting or making amendments in the original return already filed would not constitute revised return.

17. Thus, the main reason for formation of the belief that income has escaped assessment is that the petitioner was not entitled to file a revised return beyond the prescribed statutory period, and that the statement of revised computation of income submitted by the petitioner would not constitute a revised return.

18. What is now required to be considered by the court is whether there is any tangible material on the basis of which the Assessing Officer could have formed such a belief, and as to whether the assessment is sought to be reopened on a mere change of opinion.

19. From the facts emerging on record, it is apparent that the Assessing Officer had raised certain queries vide notice dated October 17, 2008 issued under section 142(1) of the Act, pursuant to which the petitioner had submitted a revised computation indicating a lower income than what was shown in the original return, which came to be accepted by the Assessing Officer while framing assessment under section 142(3) of the Act. In terms of the aforesaid decisions referred to in the reasons recorded such revised computation could not be treated a revised return. Even if the same were to be treated as a revised return, the same had been filed beyond the prescribed period of limitation, hence the consequences would follow. However, a perusal of the assessment order indicates that this was the only issue before the Assessing Officer while framing assessment under section 143(3) of the Act. The petitioner had initially filed a return of income and pursuant to the queries raised by the Assessing Officer had submitted a revised computation of income, which had in terms been accepted by the Assessing Officer. In the circumstances, when this was the only issue before the Assessing Officer, it cannot be said that the Assessing Officer has not applied his mind to this aspect. Applying the concept of “change of opinion” as the in-built test as laid down in the case of Kelvinator of India Ltd. [2010] 320 ITR 561 (SC), it is apparent that the Assessing Officer while framing the original assessment has examined the claim of the petitioner as per the revised computation of income and has accepted the same. If while accepting the claim, the Assessing Officer has failed to view the same from the angle that a revised computation of income cannot be treated to be a revised return, or that if treated as a revised return it had been submitted beyond the prescribed period of limitation, it is an error on the part of the Assessing Officer, in which case, the remedy lies elsewhere. An error committed by the Assessing Officer who framed the original assessment cannot be subject-matter of reopening of the assessment under section 147 of the Act. An opinion having been formed on the very issue on which the assessment is sought to be reopened, and that too the only issue, it can only be viewed as a change of opinion on the part of the successor-Assessing Officer.

20. Apart from the aspect of change of opinion, examining the case from the aspect of escapement of income, the case of the respondent is that if the revised computation had not been accepted, the assessee would have been taxed as per the original computation given in the return filed by it, which would be on a higher amount. However, it is not the case of the respondent that the revised computation was not correct. In the circumstances, when the revised computation is the correct computation and the petitioner has been assessed accordingly, it cannot be said that any income has escaped assessment within the meaning of the said expression as envisaged under section 147 of the Act. It is true that sub-section (5) of section 139 of the Act prescribes a time limit within which a revised return can be filed. In case the Assessing Officer has accepted the return without considering the aspect of limitation, the order at best is an erroneous order, however, on the facts of the case it cannot be stated that this is a case of income having escaped assessment. This being so, the basic requirement for invoking section 147 of the Act does not stand satisfied and as such the assumption of jurisdiction by the Assessing Officer is without authority of law.

21. In the case of S. R. Koshti v. CIT [2005] 276 ITR 165 (Guj), on which reliance was placed by the learned advocate for the petitioner, this High Court, while considering the powers under section 264 of the Act has observed that regardless of whether the revised return was filed or not, once an assessee is in a position to show that the assessee has been over-assessed under the provisions of the Act, regardless of whether the over-assessment is a result of the assessee’s own mistake or otherwise, the Commissioner has power to correct such an assessment under section 264(1) of the Act. The court referred to an unreported decision of this court in the case of Vinay Chandulal Satia v. N. O. Parekh, CIT in Special Civil Application No. 622 of 1981 wherein after placing reliance on several decision of the Supreme Court, this court held that the State authorities should not raise technical pleas if the citizens have a lawful right and the lawful right is being denied to them, merely on technical grounds. The State authorities cannot adopt the attitude which private litigants might adopt.

22. In the present case, the respondent has nowhere stated that the corrected computation submitted by the petitioner is incorrect or that the petitioner is not entitled to be taxed on the said income. The only ground for reopening is that the petitioner was not entitled to file a revised statement beyond the statutory period under section 139(5) of the Act and the Assessing Officer was not justified in accepting the corrected statement and making assessment accordingly.

23. For the purpose of reopening the assessment, the Assessing Officer has placed reliance upon decisions of two High Courts referred to hereinabove. Both these decisions are old decisions which the Assessing Officer, while framing the original assessment, would be well aware of. It is not as if the said decisions are recent decisions which may have escaped the notice of the Assessing Officer so as to constitute material for reopening of the assessment. The decisions referred to in the order recording reasons can, in no manner, be said to be tangible material so as to justify initiation of proceedings under section 147 of the Act. Thus, in effect and substance, the reopening is based on a mere change of opinion and as such, the impugned notice under section 148 of the Act as well as all proceedings pursuant thereto cannot be sustained.

24. For the foregoing reasons, the petition succeeds and is accordingly allowed. The impugned notice dated July 28, 2010 issued under section 148 of the Act (annexure A to the petition) as well as proceedings pursuant thereto are hereby quashed and set aside.

25. Rule is made absolute accordingly with no order as to costs.

[Citation : 336 ITR 585]

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