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2013 (10) TMI 970 - AT - Income TaxValidity of re-opening u/s 147 of the Income Tax Act Held that - Assessing Officer had considered the aspect of the difference between the amounts shown in the TDS certificates issued by M/s. Deutsche Bank and what was accounted by the assessee. Explanation in this regard was furnished by the assessee. Once a query was raised and a reply was given and the extract of such reply was stated in the assessment order, therefore, it cannot be said that the Assessing Officer had not applied his mind. He had indeed applied his mind and came to a conclusion that the difference stood reconciled. There is no new tangible material available with the Assessing Officer for coming to a conclusion that reconciliation given by the assessee was wrong or incorrect. Based on the very same set of records, AO had formed a different opinion for initiating a reassessment. Change of opinion cannot be a basis for reopening as held by the Hon ble Full Bench of the Delhi High Court in the case of CIT Vs. Kelvinator of India Ltd. 2002 (4) TMI 37 - DELHI High Court which was affirmed later by the Hon ble Supreme Court in CIT VS. Kelvinator of India Ltd. 2010 (1) TMI 11 - SUPREME COURT OF INDIA . Especially so, where four years had elapsed from the end of the assessment year. There is no case for the Revenue that the assessee had failed to furnish full and true information as required under the Act Re-opening of assessment has rightly been quashed Decided against the Revenue.
Issues:
Validity of reassessment proceedings based on difference in income reported by the assessee and TDS certificates. Analysis: The appeal concerned the validity of reassessment proceedings initiated by the Revenue due to a variance in the income reported by the assessee and the TDS certificates. The assessee, engaged in trading financial instruments, had filed a return showing a loss for the relevant assessment year. Subsequently, a notice under section 148 was issued proposing a reopening based on the difference in income reported. The assessee contended that the reassessment was initiated on a change of opinion and did not meet the conditions under section 147. The Commissioner of Income Tax (Appeals) held the reassessment proceedings invalid based on the timing of the notice issued after four years from the end of the assessment year. During the original assessment, the Assessing Officer had raised queries regarding the variance in income reported by the assessee and the TDS certificates. The assessee provided a reconciliation, which was considered by the Assessing Officer in the original assessment. The Tribunal noted that the Assessing Officer had applied his mind and reconciled the difference based on the information provided by the assessee. The Tribunal emphasized that there was no new material available for a different opinion to be formed for initiating reassessment. Citing legal precedents, the Tribunal concluded that a change of opinion cannot be the basis for reopening assessments, especially after four years from the end of the assessment year. As the assessee had provided full and true information during the original assessment, the Commissioner of Income Tax (Appeals) decision to quash the reopening was upheld. The Departmental Representative argued that the details provided by the assessee were insufficient for disclosure under the Act. However, the Tribunal found that the Assessing Officer had considered the reconciliation provided by the assessee during the original assessment, indicating that the assessee had fulfilled its disclosure obligations. The Tribunal dismissed the appeal of the Revenue, affirming the decision of the Commissioner of Income Tax (Appeals) to invalidate the reassessment proceedings. In conclusion, the Tribunal upheld the decision to quash the reassessment proceedings, emphasizing that a change of opinion without new material cannot justify reopening assessments, especially after the lapse of four years from the relevant assessment year. The Tribunal found no deficiency in the information provided by the assessee during the original assessment, leading to the dismissal of the Revenue's appeal.
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