ACIT, CIRCLE - 10(2), KOLKATA, KOLKATA vs. M/S. VESUVIUS INDIA LTD., KOLKATA

आदेश /O R D E R PER S.S.Godara, Judicial Member:- This Revenue’s appeal for assessment year 1999-00 arises against the Commissioner of Income Tax (Appeals)-11, Kolkata’s order dated 19.09.2017 passed in case No.609/CIT(A)-11/Kol/2014-15 involving proceedings u/s 147 r.w.s.143(3) of the Income Tax Act, 1961; in short ‘the Act’. The Revenue raises following substantive grounds in its instant appeal reads as under:- “1) The Learned. CIT(A) was not correct in law and in facts by quashing the order passed by the Assessing Officer u/s. 147/143(3) of the IT Act, 1961 for the A.Y 1999-2000. 2) The Learned. CIT(A) was not correct in law as well as facts in holding that not new tangible material was available with Assessing Officer for reopening of assessment and therefore the necessary ingredients of section 147 of IT Act, 1961 were not fulfilled for the AY 1999-2000.

A.Y. 1999-00 ACIT, Cir-10(2), Kol. Vs. M/s Vesuvius India Ltd. Page 2 3) The Ld. CIT(A) was not correct in law as well as facts in failing to appreciate that where the initial return is processed under section 143(1) of the Act, the AO can form reasons to believe that income has escaped assessment by examining the very return and / or the documents accompanying the return.”

Heard both the parties. Case file perused. 2. We notice in the backdrop of Revenue’s above pleadings that the CIT(A) has quashed the impugned re-opening / re-assessment on account of lack of new tangible material as follows:- “Decision: 1. Ground of Appeal NO.1 is against reopening of the case u/s.

147. I this background, notice u/s. 148 has been issued on 27-12-2004 initiating reassessment proceedings u/s. 147 and the reasons for initiating reassessment proceeding has been duly provided to the assessee that the use of the term derived from in the relevant position of the at indicates the restricted meaning to cover only the profit and gains directly accruing from the conduct of the business of the undertaking and thus deduction u/s. 80IA had been granted at higher value than actually allowable as per Act. In response to the said notice the assessee vide letter dated 19-01-2005 stated that revised return be treated as return filed in response to notice u/s. 148 1.1 In appeal it is submitted that the reopening of the case by the AO by issue of notice u/s. 147 was not justified as there was no fresh material fact s available before the AO and that the same was change of opinion on pat of the Assessing Officer. For the above submissions reliance has been placed on the decision in CIT – vs. – Kelvinator of India Limited (2002) 256 ITR

1. (Del)(FB),, Amiya Sales & Industries –vs. – Asstt.CIT (2005) 274itr 25. (Cal) as well as Jagatdal Jut & Industries Ltd. – vs. – DCIT (2004) 91. TTJ 770 (Kol) and Pressman Advertising & Marketing Ltd. – vs.- ACIT (2004)

90. TTJ 483 (Kol) etc. It was further submitted that in the Appellant’s case, there was no change of law and no fresh material had come on record enabling the AO to invoke the power u/s. 147 of the Act. This is a case of mere change of opinion which do not afford jurisdiction to initiate proceedings u/s. 147 of the Act. 1.2 The AR vide the supplementary submission filed on 18-09-2017, further submitted that in the case of CIT – vs. Orient Craft Ltd. (2013) 354 ITR 536 (Del), the Hon'ble High Court held that: Sec. 147 makes no distinction between an order passed u/s. 143(3) and the intimation u/s. 143(1). It is not permissible to adopt different standards while interpreting the words “reason to believe” vis-a-vis Sec. 143(1) and Sec. 143(3). Where the reason for reassessment discloses that the AO has formed his belief on the basis of the return of income, it is nothing but a reviews of earlier proceedings, not permissible in view of Apex Court decision in CIT –vs.-Kelvinator of India Ltd. (2010) 320 ITR 561 (SC) 1.3 Further, it was also submitted that similar issue has been decided in favour of the appellant by the hon'ble Kolkata ITAT in AY 2002-03 (ITA No. 2138/Kol/2013) vide order dated 03-05-2017. 1.4 The contention of the Appellant against reopening of the case u/s. 1147 have been duly considered. Placing reliance in the case of CIT – vs.- Orient Craft Ltd. (supra) and the decision of the hon'ble Kolkata ITAT in the appellant’s own case for AY 2002-03,it is held that as no new tangible material was available with the AO for reopening the