COMMISSIONER OF INCOME TAX Vs. VAISHALI AVENUE

JUDGEMENT

(1.) BY way of this appeal under s. 260A of the IT Act, 1961 ('the Act'), the Revenue seeks to question the order dt. 4th July, 2013 passed by the Income -tax Appellate Tribunal, Jodhpur Bench, Jodhpur ('Tribunal') in ITA No. 113/Jd/2013 relating to the asst. yr. 2006 -07 wherein the Tribunal has found the reassessment proceedings not sustainable for being based only on change of opinion, and has, accordingly, quashed the reassessment order passed against the respondent -assessee. In brief, the relevant background aspects of the matter could be noticed in the following: The respondent -assessee filed the return of income on 31st Oct., 2006 declaring total income of Rs. 87,24,190 for the asst. yr. 2006 -07. The order under s. 143(3) was passed by the A.O. on 19th Dec., 2008 accepting the income as declared. However, the successor A.O. proceeded to examine the assessment record and purportedly believed that the income chargeable to tax had escaped assessment or had been under -assessed. The successor AO, therefore, proceeded to issue the notice under s. 148 of the Act while stating as under:

(2.) THE assessee objected to the proceedings for reopening of the assessment but the objections were rejected. Thereafter, the A.O. observed that under the Act, only that much of the expenditures could be allowed against business receipts which were actually incurred during the year; and that only a sum of Rs. 52,35,400 was actually incurred and the rest amount of Rs. 35,00,000 was taken as provision, which could not have been allowed. With these observations, the A.O. disallowed the said amount of Rs. 35,00,000 and added the same to the income.

(3.) IN further appeal, the Tribunal, however, found the approach of the A.O. and CIT(A) unjustified. The Tribunal held that all the facts were available before the A.O. at the time of framing the original assessment order; and the A.O. having taken one of the possible views, the same A.O. or his successor A.O. could not have taken a different view as it would amount to a change of opinion. With reference to the decision of the Hon'ble Supreme Court in CIT vs. Kelvinator of India Ltd. : (2010) 228 CTR (SC) 488 : (2010) 34 DTR (SC) 49 : (2010) 320 ITR 561 (SC), the Tribunal found unsustainable the reassessment proceedings, based merely on change of opinion and proceeded to quash the same. The Tribunal observed and held as under: