2018 (6) TMI 1326 - HC - Income Tax

Reopening of assessment - change of opinion - Held that - In this case, primafacie the petitioner has shown absence of any new facts or law coming to the notice of the Assessing Officer after passing of assessment orders in regular assessment proceedings. In the present facts, (particularly the claim made in computation of income) prima-facie if the stand of the Revenue is to be accepted, the sanctity/finding attached to the proceedings under Section 143(3) of the Act would be done away with and it would be open to the Revenue to do piecemeal assessments by re-opening the same. Therefore, the reasons in support of the notice, prima-facie indicates a change of opinion. We are prima-facie of the view, that the impugned notices are without jurisdiction. Therefore, there shall be interim stay in terms of prayer clause (d) in both the petitions.

Summary

Issues:
Challenge to notices for reopening of assessment under Section 148 of the Income Tax Act for Assessment Years 2013-14 and 2014-15.

Analysis:
1. The petitions contested the notices for reopening of assessment issued under Section 148 of the Income Tax Act for the Assessment Years 2013-14 and 2014-15. The impugned notices were issued within the statutory period and were based on the belief that income chargeable to tax had escaped assessment due to deductions claimed on account of changes in contractual terms related to asset restructuring. The reasons cited relied on a Supreme Court decision to support the claim that RBI guidelines do not determine taxability under the Act.

2. The petitioner argued that the Assessing Officer had allowed the deduction claim during the original assessment proceedings, as evidenced by the computation of income and related notes. The petitioner contended that the reasons for reopening the assessment indicated a change of opinion by the Assessing Officer, rendering the notices without jurisdiction. The Revenue, however, asserted that the claim had been overlooked in the original assessment and there was no change of opinion as the issue was not addressed previously.

3. The High Court referred to relevant legal principles, emphasizing that the Assessing Officer has the power to reassess but not to review an assessment order based on a change of opinion. The Court noted that the assessment orders implicitly allowed the deduction claim, as disallowed claims were explicitly mentioned. The Court highlighted that the Assessing Officer's satisfaction with the claim during the original assessment was evident from the documents submitted, and there was no need for further queries or explicit mention in the assessment order.

4. The Court distinguished previous decisions cited by the Revenue, indicating that they were not applicable to the present case. The Court analyzed the reasons provided for reopening the assessment and found them lacking fresh facts or law that would warrant reassessment. The Court concluded that the impugned notices appeared to be based on a change of opinion rather than new information, rendering them without jurisdiction.

5. Based on the above analysis, the High Court was of the prima facie view that the notices for reopening the assessment were without jurisdiction. Consequently, an interim stay was granted on the notices, and the matter was expedited for further proceedings. The Court allowed liberty to apply for any necessary actions and waived service of notice on behalf of the respondents.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved, the arguments presented by both parties, and the legal principles applied by the High Court in reaching its decision to grant an interim stay on the notices for reopening the assessment.