Case: Asian Paints Limited Vs. Deputy Commissioner of Income-Tax &amp; Another

The facts that are relevant are that the Petitioner is a company duly registered under the Companies Act and is engaged in the business of manufacturing and sale of paints and related products. The Petitioner is regularly assessed toThis petition relates to the assessment yearThe Petitioner had onfiled returns of income declaring income of Rs.227,72,31,850/inter alia disclosing provision for estimated liability of arrears of wages payable to workmen at its Ankleshwars Plant and contribution by way of reimbursement of capital loss incurred by Provident Funds, Gratuity and Superannuation Funds. Onre was issued to the Petitioner in the course of assessment proceedings investigating into aforesaid issue. Onthe Petitioner filed reply to the said notice. Onthe Petitioner submitted further information on the aforesaid two issues. Onassessment order for the assessment yearwas passed in which deduction for the aforesaid two items of expenditure was allowed. Ona notice under Section 148 was issued for the assessment yearIn the annexure accompanying the notice, it was stated that "It is seen that income chargeable to the tax has been under assessed by Rs.254.30 lakhs plus Rs.71.54 lakhs totalling at Rs.325.84 lakhs for which provisions of explanation 2(c)(i) of Section 147 are applicable."

Court's reasoning:
Perusal of that order shows that according to Dy. Commissioner ofall the relevant information was called by the Assessing Officer before making the assessment order and all the information was available on record, but inadvertently that information was not taken into account while framing the assessment and therefore, according to the Respondent No.1the Dy.Commissioner, he has reason to believe that the income has escaped assessment.6.From the record, therefore, now it is clear that the Respondent No.1 is invoking the power under Section 147 in reopening the assessment because according to him he inadvertently did not take into account the material information which was available on record, when he made the assessment order. The question is, can power under Section 147 be exercised in this situation.It is clear from the observations made above that the Full Bench of the Delhi High Court has taken a view that in a situation where according to Assessing Officer he failed to apply his mind to relevant material in making the assessment order, he cannot take advantage of his own wrong and reopen the assessment by taking recourse to the provisions of Section 147. We find, ourself, in respectful agreement with the view taken by the Full Bench of the Delhi High Court.10. It is further to be seen that the Legislature has not conferred power on the Assessing Officer to review its own order. Therefore, the power under Section 147 cannot be used to review the order. In the present case, though the Assessing Officer has used the phrase "reason to believe", admittedly between the date of the order of assessment sought to be reopened and the date of formation of opinion by the Assessing Officer, nothing new has happened, therefore, no new material has come on record, no new information has been received, it is merely a fresh application of mind by the same Assessing Officer to the same set of facts and the reason that has been given is that the some material which was available on record while assessment order was made was inadvertently excluded from consideration. This will, in our opinion, amount to opening of the assessment merely because there is change of opinion. The Full Bench of the Delhi High Court in its judgment in the case of Kelvinator, referred to above, has taken a clear view that reopening of assessment under Section 147 merely because there is a change of opinion cannot be allowed. In our opinion, therefore, in the present case also, it was not permissible for the Respondent No.1 to issue notice under Section 148.