1.  SC LARGER BENCH IN CIT Vs M/s KELVINATOR OF INDIA LIMITED HELD

"Therefore, post-1st April, 1989, power to re-open 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 re-open assessments on the basis of "mere change of opinion", which cannot be per se reason to re-open. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to re-assess. But re-assessment has to be based on fulfillment of certain pre-condition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of re-opening 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 1st April, 1989, Assessing Officer has power to re-open, 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. Our view gets support from the changes made to Section 147 of the Act, as quoted hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words "reason to believe" but also inserted the word "opinion" in Section 147 of the Act. However, on receipt of representations from the Companies against omission of the words "reason to believe", Parliament re-introduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the Assessing Officer."

NOTE ALLAHABAD HIGH COURT CONTRARY VIEWS APPARENTLY SEEMS IMPLIEDLY OVERRULED IN EMA INDIA ETC.

(click here for judgment) 

(click here for SC Settlement order reversed)

  

2.   Sitaldas K.Motwani vs DGIT(International Taxation)-Bombay High Court- Late return filing and Refund claim: Arbitrary rejection of assessee's condonation prayer u/section 119 r/w CBDT Circular DEC 2009.

 

HELD: UNDER WRIT JURISDICTION:

"Whether the refund claim is correct and genuine, the authority must satisfy itself that the applicant has a prima facie correct and genuine claim, does not mean that the authority should examine the merits of the refund claim closely and come to a conclusion that the applicant’s claim is bound to succeed. This would amount to prejudging the case on merits. All that the authority has to see is that on the face of it the person applying for refund after condonation of delay has a case which needs consideration and which is not bound to fail by virtue of some apparent defect. At this stage, the authority is not expected to go deep into the niceties of law. While determining whether refund claim is correct and genuine, the relevant consideration is whether on the evidence led, it was possible to arrive at the conclusion in question and not whether that was the only conclusion which  could be arrived at on that evidence".

(click here for judgment)  

    

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"Voice of CA"

CA. Sanjay Kumar Agarwal, Founder - Voice of CA

(Former Chairman - NIRC)

Mob : 9811080342, agarwal.s.ca@gmail.com

CA. Kapil Goel, Moderator-Direct Taxes, Mob:9910272806, cakapilgoel@gmail.com

CA. Sidharth Jain, Co-Moderator, sidhjasso@yahoo.com

CA. Mukesh K Bansal, Co-Moderator-FEMA, mkak@rediffmail.com