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2017 (1) TMI 816 - HC - Income TaxValidity of reopening of assessment - mere change of opinion - Held that - A query was raised during the regular assessment proceedings and it was responded to by the assessee. This non consideration of the same in the assessment order is no evidence of the Assessing Officer not being satisfied with the issue raised. This is not a case where the Assessing Officer has ignored / overlooked by oversight the claim made by the assessee in its return of income while allowing it as in the case of Export Credit Guarantee Corporation of India (2013 (1) TMI 517 - BOMBAY HIGH COURT ). This is a case where the Assessing Officer did apply his mind as evidenced by the query raised to the very issue which is now sought to be raised as the basis for reopening the notice and the Assessing Officer was satisfied with the response to the query during the regular assessment proceedings. In the above view, the view taken by the impugned order of Tribunal that the reopening notice is without jurisdiction as it is founded on a mere change of opinion is on facts covered by the decision of this Court in favour of the respondent assessee.
Issues involved:
1. Challenge to the order of the Income Tax Appellate Tribunal for Assessment Year 2005-06. 2. Substantial questions of law raised by the Revenue: (i) Validity of reopening the case under Section 148 of the Income Tax Act. (ii) Treatment of compensation claimed by the assessee as long term capital gains. Analysis: Issue 1: Challenge to the Tribunal's Order The appeal under Section 260A of the Income Tax Act challenges the Tribunal's order dated 21st February, 2014, for Assessment Year 2005-06. The primary contention revolves around the reopening of the case by the Assessing Officer under Section 148 of the Act. The respondent assessee objected to the reopening, citing it as a mere change of opinion without jurisdiction. The Commissioner of Income Tax (Appeals) and the Tribunal both ruled in favor of the respondent, emphasizing that the issue of compensation claimed as capital gains was already considered during the original assessment proceedings, and the Assessing Officer had accepted it as such. The Tribunal found that the reopening notice lacked jurisdiction as it was based on a supposed change of opinion, which was not the case. Issue 2: Substantial Questions of Law (i) Validity of Reopening Notice: The Tribunal's decision was based on the fact that the Assessing Officer had already considered the issue of compensation during the original assessment proceedings. The Revenue argued that the Assessing Officer did not address the issue in the assessment order, indicating non-consideration. However, the Court held that the Assessing Officer's satisfaction with the response during the original assessment was sufficient, even if not explicitly mentioned in the order. The Court referred to previous judgments to support this position, emphasizing that the mere absence of explicit discussion in the assessment order did not imply non-consideration. (ii) Treatment of Compensation: Since the validity of the reopening notice was disputed and subsequently dismissed, the question of how the compensation should be treated became academic. The Court did not entertain this question due to the preceding decision on the jurisdiction of the Assessing Officer. In conclusion, the appeal was dismissed based on the finding that the reopening notice lacked jurisdiction and was not founded on a change of opinion. The Court's analysis focused on the procedural aspects of the case, emphasizing the importance of considering all relevant issues during the original assessment proceedings to avoid unnecessary disputes and appeals.
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