2012 (6) TMI 808 - HC - Income Tax

Reopening of assessment - Held that - When on the same set of fact and materials Assessing Officer takes bonafide decision, it is not open for the subsequent officer to reopen the same just because he does not agree to the decision of the previous officer. In this case the Tribunal has recorded that a mere change of opinion between two officers in reopening of the assessment and it is not legally permissible. We, therefore, do not find any infirmity and illegality in the impugned judgment and order dated 12th January, 2012 passed by the learned Tribunal.

Summary

Issues Involved:
1. Appeal against the judgment and order passed by the Tribunal regarding the assessment year 2004-05.
2. Justification of quashing the reassessment order under Section 147/143(3) of the Income Tax Act, 1961.
3. Consideration of facts, circumstances, and legal aspects by the I.T.A.T Kolkata.
4. Legality of the reassessment proceedings and the order passed by the Tribunal.
5. Validity of reopening the assessment before the expiry of 4 years from the end of the relevant assessment year.

Analysis:

1. The appeal was filed challenging the judgment and order of the Tribunal regarding the assessment year 2004-05. The substantial questions of law raised included the justification for quashing the reassessment order under Section 147/143(3) of the Income Tax Act, 1961. The Tribunal's decision was based on the facts and circumstances of the case, as well as the legal aspects involved.

2. The Tribunal examined the records and concluded that there was no new material or information to justify the reassessment. It was observed that the Assessing Officer had based the reassessment on facts and materials provided by the assessee during the original assessment. The Tribunal deemed this as a mere change of mind by the Assessing Officer, which is not legally permissible when a regular assessment has already been made under Section 143 of the Act.

3. The Tribunal emphasized that if the Assessing Officer had taken a bona fide decision based on the same set of facts and materials during the original assessment, it was not appropriate for a subsequent officer to reopen the assessment solely due to a difference in opinion. The Tribunal held that such a change of opinion did not warrant the reopening of the assessment, and the original decision should stand unless there was new material or information justifying a reassessment.

4. The Tribunal's decision was upheld by the High Court, which found no infirmity or illegality in the judgment and order passed by the Tribunal. The Court dismissed the appeal, stating that the reassessment order was rightly quashed by the Tribunal based on the principles of law and the facts of the case.

5. The Court's decision highlighted the importance of adhering to legal principles and the requirement for new material or information to justify reopening an assessment under the Income Tax Act, 1961. The dismissal of the appeal rendered the connected application moot, leading to its disposal. All parties were directed to act upon a signed copy of the order as per the usual undertakings.