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Wave Distilleries And Breweries ... vs Assistant Commissioner Of Income Tax ... on 28 February, 2025
cites
Section 147 in The Income Tax Act, 1961 [Entire Act]
Rajasthan Excise Act, 1950
Section 144B in The Income Tax Act, 1961 [Entire Act]
Section 151 in The Income Tax Act, 1961 [Entire Act]
Indian And Eastern Newspaper Society ... vs Commissioner Of Income Tax, New Delhi on 31 August, 1979
The Hon'ble Gujarat High Court also referred to the
ITA Nos.153 to 157/LKW/2023
C.O. Nos.23, 24, 21,22 and 25/LKW/2023
Page 53 of 61
Head Note in the judgment rendered by the Hon'ble Apex Court
in the case of Indian and Eastern Newspaper Society vs. CIT
reported in [1979] 119 ITR 966 (SC) and reiterated that the
opinion rendered by the Audit Party in regard to the law cannot,
for the purpose of such belief, add to or colour the significance of
such law and that true evaluation of the law in its bearing on the
assessment must be made directly and solely by the Income Tax
Officer. Thus, based on the above judicial precedents also, we
are of the considered opinion that the AO did not hold
independent belief at any point of time that the income of the
assessee had escaped assessment for five years under appeal.
14.8 Thus, to sum up, the issue of validity of reassessment
proceedings, section 147 of the Act does not allow reassessment
of income on change of opinion. It is worthwhile to point out that
reopening was initiated with respect to alleged profit generated
on account of sales made on behalf of UBL. Disclosure to this
effect had categorically been made by the assessee in its Notes to
Accounts attached with the Balance Sheet which were duly
before the AO during the course of regular assessment
proceedings.
Commnr. Of Income Tax, Delhi vs M/S. Kelvinator Of India Ltd on 18 January, 2010
14.4 At this juncture, it will be very relevant to refer to the
judgment of the Hon'ble Apex Court in the case of CIT, Delhi vs.
Kelvinator of India Ltd. [2010] 320 ITR 561 (SC), wherein the
Hon'ble Apex Court was examining the issue as to whether the
concept of 'change of opinion' stood obliterated w.e.f. 01.04.1989,
i.e., after substitution of section 147 of the Act by the Direct Tax
Laws (Amendment) Act, 1987. In this regard, the Hon'ble Apex
Court categorically held that although post 01.04.1989, the
power to reopen was much wider, but even then section 147 does
not give extra-ordinary powers to the AO to reopen the
assessments on mere change of opinion. The Hon'ble Apex Court
went on to hold that the concept of 'change of opinion' is to be
treated as an inbuilt test to check abuse of power by the AO and,
therefore, after 01.04.1989, the AO has power to reopen,
provided there is a tangible material to come to the conclusion
that there was escapement of income from assessment. In the
present case, we are afraid that such tangible material is not
present. Although the Department has argued vehemently that
the Report of the CAG is tangible material and there are
numerous judicial precedents which now also support this view.
Income Tax Officer, Azamgarh & Anr vs Mewalal Dwarka Prasad & Vice Versa on 10 February, 1989
In
this regard, the Ld. A.R. placed reliance on the judgment of
Hon'ble Supreme Court of India in the case of ITO v. Mewalal
Dwarka Prasad, 176 ITR 529 and submitted that in this case,
the Hon'ble Apex Court had held that where assessee had
disclosed all material facts and the AO had accepted the
documents produced and had treated the transaction to be
genuine and on that footing had completed the assessment, then
it was no open for the AO to re-open the assessment on the
ground that there was failure on the part of the assessee to
disclose all material facts.
Indian Oil Corporation vs Income Tax Officer, Central Circle V, ... on 8 May, 1986
11.5 The Ld. A.R. also placed reliance on the judgement of
Hon'ble Supreme Court of India in the case of Indian Oil
Corporation vs. Indian Tax Officer, Central Circle V, Calcutta and
Ors: [1986] 159 ITR 561 (SC) and submitted that in this case the
Hon'ble Apex Court had ruled that there must be materials to
come to the conclusion that there was 'omission or failure to
disclose fully and truly all material facts necessary for the
assessment of the year.
Income Tax Officer, I Ward, Dist, Vi, ... vs Lakhmani Mewal Das on 30 March, 1976
11.7 In light of the above facts and the legal position, the
submission of the Ld. A.R. was that for assessment years 2013-
14 and 2014-15, the AO had failed to satisfy the prerequisite
conditions to issue notice under section 148 of beyond the
prescribed period of 4 years from the end of the relevant
assessment years. It was also submitted by the Ld. A.R. that in
the order passed by NFAC, disposing of the objections, it is
clearly mentioned in para 15 that "... The facts just came out
through the mist of agreements and books of accounts". The Ld.
A.R. submitted that this itself shows that there was no failure on
part of the assessee to disclose material and true facts and that
the reassessments were initiated only on the basis of the Audit
ITA Nos.153 to 157/LKW/2023
C.O. Nos.23, 24, 21,22 and 25/LKW/2023
Page 28 of 61
Report. The Ld. A.R. submitted that the Hon'ble Supreme Court
in the case of Lakhmani Mewal Das (supra) unequivocally held
that "If an Income-tax Officer draws an inference which appears
subsequently to be erroneous, mere change of opinion with regard
to that inference would not justify initiation of action for reopening
assessment."