2014 (7) TMI 43 - HC - Income Tax

Validity of reopening of notice u/s 148 of the Act - Mere change of opinion Held that - The notice issued u/s 148 of the Act is beyond the period of four years from the end of relevant AY - The reasons recorded do not indicate anywhere that the income for the relevant AY has escaped assessment on account of assessee not having disclosed any material fully and truly - The reasons does speak of the Form No. 10 submitted by the assessee not having reflected the setting apart of a sum of Rs. 93.20 lakhs for any specific purpose - When the reasons themselves do not indicate anywhere that the assessee had not truly and fully disclosed all material facts now has any material brought to reveal non-disclosure - for the subsequent year, the notice for reopening was within the period of four years and yet on examination of the fact - it was a mere change of opinion on the part of the AO who previously framed assessment on scrutiny and the notice came to be quashed the assumption of jurisdiction on the part of the AO itself is not sustainable Decided in favour of Assessee.

Summary

Issues involved:
Challenge to notice of reopening for Assessment Year 2007-08 beyond the statutory period.

Detailed Analysis:
The petitioner, a registered trust, challenged the notice of reopening issued by the Assessing Officer for the A.Y 2007-08, claiming that the original return should be considered as a response to the notice under Section 148. The reasons for reopening included irregularities in the claimed deductions under Section 11(2) of the Income-tax Act. The petitioner objected to the proceedings, which were disposed of by the Assessing Officer, leading to the present petition.

Legal Analysis:
The Assessing Officer issued the notice beyond the four-year period from the relevant assessment year. The law requires the officer to form a belief that income has escaped assessment due to non-disclosure of material facts by the assessee. In this case, the reasons for reopening did not indicate any non-disclosure by the petitioner. Previous judgments in similar cases highlighted that reopening without additional material would be a change of opinion, not permissible under the law.

Court's Decision:
The Court found that the notice was based on a mere change of opinion by the Assessing Officer, as the issue had been examined during the original assessment. The absence of any indication of non-disclosure led to the quashing of the notice. The Court emphasized that the assumption of jurisdiction by the Assessing Officer was not sustainable in this case.

Conclusion:
The petition was allowed, and the notice of reopening under Section 148 of the Act, along with all subsequent proceedings, was quashed. The Court held that the contention of alternative remedy was not sustainable, citing relevant judicial pronouncements. Each party was directed to bear their own costs.