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2010 (11) TMI 686 - HC - Income TaxAssessment u/s 143(3) read with section 148 of the Act - the assessment was reopened essentially not because of escapement of income, but because of change of opinion, which was not permissible even in the amended provisions under section 147 - The sole basis on which the assessment has been reopened is that while framing the original assessment order, the Assessing Officer has accepted the system of accounting adopted by the assessee as valid, whereas in the re-assessment made under section 147, the system of accounting adopted by the assessee has not been considered to be appropriate - It is therefore change of opinion on the basis of which re-assessment is made - The learned Tribunal has relied on the law laid down by the Supreme Court in CIT v. Foramer France ( 2003 (1) TMI 101 - SUPREME Court - to hold that reopening of assessment on mere change of opinion especially when there is no non-disclosure of material fact by assessee, is not permissible - Hence, the appeal is dismissed accordingly.
Issues:
1. Condonation of delay in filing appeals due to Tribunal's failure to notify concerned parties. 2. Validity of reopening assessments for the assessment years 1995-96 and 1997-98. 3. Discrepancies in income assessment and rejection of books of account under section 145(3) of the Income-tax Act. Issue 1 - Condonation of Delay: The appeals were filed after a delay of 1138 days, citing lack of intimation by the Departmental Representative regarding the Tribunal's decision. The Tribunal's failure to send copies of the order to the relevant parties in Jaipur was noted. The Court accepted that the appellant was justified in the delay due to this reason. Condonation of delay was granted under section 5 of the Limitation Act, and the appeals were allowed to be heard on merits. Issue 2 - Validity of Reopening Assessments: The appeals were related to the assessment years 1995-96, 1996-97, and 1997-98. The Assessing Officer had reopened the assessments under section 147, alleging non-disclosure of income by the assessee. However, the Tribunal found that the assessments were reopened due to a change of opinion, which was impermissible under section 147. The Tribunal highlighted that there was no failure of the assessee to disclose material facts during the original assessment. The Court agreed with the Tribunal's findings and cited legal precedents to support the conclusion that reopening assessments based on a mere change of opinion is not valid. Issue 3 - Discrepancies in Income Assessment: The assessee, engaged in a lottery business, faced discrepancies in income assessment, leading to rejection of books of account under section 145(3) of the Income-tax Act. The Assessing Officer applied a net profit rate on the turnover of the branches. The CIT(A) upheld the reopening of assessment with some reliefs. Both the assessee and the revenue filed appeals before the Tribunal, which ultimately decided on the matter. The Court reviewed the arguments presented by the appellant's counsel regarding the alleged evasion of income and the relevance of previous judgments. However, the Court found no legal infirmity in the Tribunal's order and dismissed both appeals. In conclusion, the High Court of Rajasthan dismissed the appeals after addressing the issues of delay condonation, validity of reopening assessments, and discrepancies in income assessment, upholding the Tribunal's decision in each aspect.
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