2018 (1) TMI 232 - AT - Income Tax

Reopening of assessment - date of issue of notice u/s 148 - Held that - Since the order sheet of the assessment record, the despatch register clearly shows that the date of issue of notice was 31.03.2013, we hold that the notice u/s 148 was issued on 31.03.2013. Since the assessment is reopened within 4 years from the end of the relevant assessment year, the assessing officer has rightly reopened the assessment with the approval of the Addl. Commissioner of Income Tax. Therefore, we set aside the order of the Ld. CIT on this issue and allow the appeal of the revenue. Revenue s appeal on this issue is allowed. Change of opinion - Held that - On verification of the assessment order passed u/s 143(3) dated 24.10.2010, there is no whisper with regard to non submission of any of the details called for by the assessing officer. Therefore, there is no failure on the part of the assessee w.r.t. submission of the details and having submitted the details by the assessee, it is presumed that the assessing officer has verified the same and completed the assessment. There is no other fresh material available to the assessing officer. Since the assessee has furnished the details, and the assessing officer has reopened the assessment, on the basis of same information which was already examined by him and completed the assessment u/s 143(3), reexamination of the same material would amount to revision of the same issue and change of opinion. It is settled issue that to reopen the completed assessment, tangible material is required. If no new information is available to the assessing officer, assessments already completed cannot be reopened merely because of suspicion or surmises. Therefore, we agree with the Ld.CIT(A) that the assessment is reopened on mere change of opinion but not on any fresh information and there is no tangible material available to the department. Accordingly, we uphold the order of the Ld.CIT(A) and dismiss the appeal of the revenue on this ground. - Decided against revenue

Summary

Issues Involved:
1. Date of issue of notice under Section 148.
2. Change of opinion for issuing notice under Section 148.
3. Merits of the case.

Issue-Wise Detailed Analysis:

1. Date of Issue of Notice under Section 148:
The primary contention revolves around the date of issuance of the notice under Section 148. The assessee argued that the notice, although signed on 31.03.2013, was delivered to the post office on 03.04.2013, which should be considered the issuance date. This delay would render the notice invalid as it exceeded the four-year limit without the requisite approval from the Commissioner of Income Tax. The Ld.CIT(A) supported the assessee's view, invalidating the notice for being issued beyond the permissible period. However, the revenue contended that the notice was effectively issued on 31.03.2013 when it was handed over to the despatch section, which operates under the supervision of the Addl. CIT/Joint CIT. The tribunal upheld the revenue's argument, noting that the internal procedure of the department and the despatch register indicated the notice was indeed issued on 31.03.2013. Consequently, the tribunal set aside the Ld.CIT(A)'s order on this issue, validating the notice issued within the four-year limit.

2. Change of Opinion for Issuing Notice under Section 148:
The assessee challenged the reopening of the assessment, alleging it was based on a mere change of opinion without any new tangible material. The Ld.CIT(A) agreed, citing that the original assessment under Section 143(3) was completed after thorough verification of all details and books of accounts. The reopening was deemed a mere re-evaluation of the same information. The tribunal reviewed the reasons for reopening, which included discrepancies in the closing stock and unaccounted purchases and sales. The revenue argued that the assessing officer did not previously examine these specific issues. However, the tribunal found that the information leading to the reopening was already available during the original assessment, and no new tangible material was presented. Thus, the tribunal upheld the Ld.CIT(A)'s decision, confirming that the reopening was indeed based on a change of opinion, which is impermissible.

3. Merits of the Case:
Given the tribunal's decision that the assessment was reopened based on a change of opinion, it deemed it unnecessary to adjudicate the merits of the additions made. The assessment was struck down on procedural grounds, rendering the discussion on merits moot.

Cross Objection:
The cross objection by the assessee was supportive of the Ld.CIT(A)'s order. Since the tribunal dismissed the revenue's appeal on the grounds of change of opinion, it found no need to separately adjudicate the cross objection.

Conclusion:
The tribunal partly allowed the revenue's appeal by validating the date of notice issuance but upheld the Ld.CIT(A)'s decision on the improper reopening of the assessment due to a change of opinion. Consequently, the cross objections were dismissed. The judgment was pronounced in the open court on 30th August 2017.