2013 (6) TMI 914 - AT - Income Tax

Summary

Issues Involved:
1. Validity of the reopening of the assessment u/s 147.
2. Deletion of additions made by the Commissioner of Income-tax (Appeals).

Summary:

Issue 1: Validity of the Reopening of the Assessment u/s 147
The first issue concerns the jurisdictional question of whether the reopening of the assessment by the Assessing Officer (AO) u/s 147 was valid. The original return was filed on 29-12-2006, and the scrutiny assessment was completed u/s 143(3) on 31-12-2008. A notice u/s 148 was issued on 25-3-2011 to verify expenses claimed by the assessee, including land development costs and payments subject to TDS.

The assessee objected, stating that all issues raised by the AO were already examined during the original assessment. The Commissioner of Income-tax (Appeals) found that the AO had indeed scrutinized all relevant details during the original assessment, and no new material evidence justified reopening the case. The Commissioner relied on the judgments of CIT vs. Cholamandalam Investment and Finance Company Ltd. and CIT vs. Kelvinator of India Ltd., which held that reassessment cannot be based merely on a change of opinion without tangible material indicating income escapement.

The Tribunal upheld the Commissioner's decision, stating that the AO reopened the assessment to re-examine issues already scrutinized, without any fresh evidence. Thus, the reopening was deemed invalid.

Issue 2: Deletion of Additions Made by the Commissioner of Income-tax (Appeals)
Given that the assessment itself was set aside, the issues raised by the Revenue on the merits of the case became academic and infructuous. The Tribunal did not address these issues in detail as the primary jurisdictional issue invalidated the entire reassessment process.

Conclusion:
The appeal filed by the Revenue was dismissed, and the reassessment proceedings u/s 147 were declared invalid. The Tribunal upheld the Commissioner of Income-tax (Appeals)'s decision to set aside the assessment, rendering the Revenue's additional contentions moot.