2015 (11) TMI 1824 - AT - Income Tax

Reopening of assessment - four years has expired from the end of the relevant assessment year as on the date of issuance of notice u/s. 148 - change of opinion - Unexplained divided received - HELD THAT - In this case, the assessee has filed complete details as is evident from the above facts and the details in respect of divided received and also the details of expenditure, which have been filed by the assessee vide different letters addressed to the AO, we feel that the reopening is just merely a change of opinion and nothing else. The change of opinion is not permissible in law as held by the Hon ble Apex Court in the case of Foramer France 2003 (1) TMI 101 - SC ORDER and JINDAL PHOTO FILMS LTD. 1998 (5) TMI 20 - DELHI HIGH COURT Thus we are of the view that even in post-1989 amended provision of Section 147 of the Act, change of opinion is not permissible. Accordingly, we allow this legal issue of the assessee s appeal and reverse the order of lower authorities on this issue.

Summary

Issues:
1. Jurisdiction of AO u/s. 147 read with section 148 of the Income-tax Act, 1961.

Detailed Analysis:
Jurisdiction of AO u/s. 147 read with section 148 of the Act:
The appeal pertains to the jurisdiction of the Assessing Officer (AO) under sections 147 and 148 of the Income-tax Act, 1961. The AO initiated reassessment proceedings for the assessment year 2001-02 based on the non-disallowance of expenditure related to exempted dividend income u/s. 10(33). The AO issued a notice u/s. 148 after the completion of the original assessment u/s. 143(3) of the Act. The assessee contended that the notice was invalid as the assessment was completed, and the time limit for issuing the notice had expired. The AO's reasons for reopening the assessment were solely based on assessment records and a CBDT circular. The Tribunal held that the reopening was a change of opinion and not permissible under the law.

The Tribunal emphasized that the AO's reasons did not allege any failure on the part of the assessee to disclose material facts necessary for assessment. The Tribunal referred to the Supreme Court's decision in CIT v. Foramer France, where it was held that reopening an assessment based on the same facts and a different view amounted to a change of opinion. The Tribunal also cited the Allahabad High Court's decision, emphasizing that the law prevailing at the time of issuing the notice under section 148 should be considered. The Tribunal further cited the Delhi High Court's ruling in Jindal Photo Films Ltd v. Dy CIT, stating that a mere change of opinion without new material or facts does not provide jurisdiction to initiate proceedings under section 147.

In conclusion, the Tribunal allowed the appeal, reversing the lower authorities' decision on the jurisdiction issue. Since the jurisdiction issue was decided in favor of the assessee, the Tribunal did not delve into the merits of the case, ultimately allowing the assessee's appeal.

This detailed analysis of the judgment highlights the critical aspects of the jurisdictional issue under sections 147 and 148 of the Income-tax Act, 1961, as addressed by the Appellate Tribunal ITAT Kolkata in the given case.