2010 (2) TMI 944 - HC - Income Tax

Validity of Reopening of assessment non satisfaction of condition laid u/s 147 - order passed by the Commissioner of Income-tax (Appeals) was reversed by the Tribunal on February 20, 2009 - notice for reopening of the year under consideration was issued on March 16, 2009 Held that - If the Department had any grievance against the order of the Tribunal, the Department should have filed tax appeal before this court challenging the said order. It could not give any rise to the reopening of the assessment as there is no failure or omission on the part of the petitioner nor can it be said that there is change of opinion - Assistant Commissioner has no jurisdiction to reopen the assessment as the conditions precedent laid down under section 147 are not satisfied

Summary

Issues:
Challenge to notice of reopening for assessment year 2004-05 under section 148 of the Income-tax Act, 1961.

Analysis:
The petitioner filed a petition under article 226 of the Constitution of India seeking to quash the notice of reopening issued by the respondent for assessment year 2004-05. The petitioner's income tax return was selected for scrutiny assessment, and an order was passed determining the total income. The petitioner appealed the decision, but the Commissioner of Income-tax (Appeals) ruled against the petitioner. The Assistant Commissioner of Income-tax observed that there was no unabsorbed loss/depreciation remaining to be reduced from the book profits for computation under section 115JB for the assessment year 2004-05. Subsequently, the petitioner appealed to the Tribunal, which disposed of the appeal before the notice of reopening was issued. The reasons for reopening included adjustments made for MAT under section 115JB, resulting in an alleged underassessment of income. The petitioner raised objections, which were rejected by the respondent, leading to the present petition challenging the notice of reopening.

The Assistant Commissioner's decision to reopen the assessment was challenged on the grounds that the conditions precedent under section 147 were not satisfied. The court held that there was no failure or omission on the part of the petitioner, nor was there a change of opinion to warrant the reopening of the assessment. The court emphasized that if the Department disagreed with the Tribunal's decision, it should have filed a tax appeal instead of resorting to reopening the assessment. Consequently, the court quashed and set aside the notice of reopening, ruling in favor of the petitioner. The judgment concluded by making the rule absolute without any order as to costs.