C.I.T., AMRITSAR vs. M/S BHAGAT INDUSTRIAL CORP. LTD., AMRITSAR

-1- IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH ITA No. 593 of 2008 Date of Decision: November 27, 2008. The Commissioner of Income Tax-II ---Appellant Amritsar.

Versus

M/s Bhagat Industrial Corp. Ltd. --Respondent CORAM:- HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE L.N. MITTAL Present: Ms. Navender P.K. Singh, Senior Standing Counsel for the appellant. *** ADARSH KUMAR GOEL.J (ORAL) This appeal has been preferred under Section 260 A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar passed in I.T.A. No.60/(ASR)/2006 and C.O. 31 (ASR)/2007 dated 7.11.2007 for the Assessment Year 1997-98, proposing following substantial questions of law :- i) Whether on the facts and in the circumstances of the case Ld. ITAT was right in law in taking recourse to Rule 27 of the Appellate Tribunal Rules, 1963 on behalf of the assessee? ii) Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal was right in concluding that A.O. Had failed to assign valid and cogent reasons for reopening the assessment proceedings.

-2- iii) Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal has erred in law in not considering the fact that the case in question fall under proviso to Section 147 of the Act. iv) Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal is correct in law in holding that the reasons assigned for reopening the assessment proceedings would amount to “change of opinion” thus not constituting a valid ground to reopen the assessment proceedings. The assessing officer finalised the assessment of the assessee and thereafter issued notice under Section 148 stating that claim for depreciation in respect of Effluent Treatment Plant (ETP) was not justified, as the assessee had not paid installments of the Effluent Treatment Plant (ETP). The assessee challenged the said findings on the ground that the same was without any fresh material. The CIT(A) accepted the said plea and the Tribunal upheld the same. It was observed:- “ In the above view of the matter, in our considered opinion, the assessee is justified in alleging that the reopening of the assessment completed on the assessee after four years from the end of the relevant assessment year, is bad in law and invalid for the reason that the A.O. Has not established on record any failure or omission on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for that year. It is also illegal for the reason that such reopening was only by way of a mere change of opinion of the A.O. on the same set of facts as present at the time of the original assessment proceedings.”

-3-

We have heard learned counsel for the appellant. It is well settled that mere change of opinion cannot by itself be a ground for reassessment unless there is material to show concealment or escapement of income. The CIT(A) as well as the Tribunal examined the issue and have recorded a finding of fact that there was nothing to sustain the satisfaction required to be formed for reassessment. We, thus, do not find any substantial question of law.

The appeal is accordingly dismissed.

(ADARSH KUMAR GOEL) JUDGE (L.N. MITTAL) JUDGE 27.11.2008 lucky