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2019 (1) TMI 120 - HC - Income TaxReopening of assessment - change of opinion - Held that - Supreme Court in the case of Commissioner of Income Tax Vs. Kelvinator of India Ltd. 2010 (1) TMI 11 - SUPREME COURT OF INDIA has held that even post the amendments in Section 147 w.e.f. 01.04.1989, the concept of change of opinion continues to apply. As long as certain claim made by the assessee was examined by the Assessing Officer, whether the Assessing Officer raised correct queries and came to the correct conclusion or not, in the context of reopening of assessment, would be of no consequence. There is a vital difference between a conclusion of the AO after scrutiny which may appear to the Revenue to be erroneous and a situation where the AO during the scrutiny assessment does not examine a particular claim of the assessee altogether. The later will follow within the purview of reopening of assessment, particularly when the notice is issued within a period of 4 years but the former may not. Since we uphold the Tribunal's decision on the invalidity of the reopening, the other issues on merits need not be gone into. No question of law arises.
Issues:
Validity of reassessment proceedings under Section 147 of the Income Tax Act, 1961. Analysis: The High Court of Bombay heard an appeal by the Revenue against the Income Tax Appellate Tribunal's judgment regarding the validity of reassessment proceedings under Section 147 of the Income Tax Act, 1961. The primary issue raised was whether the Tribunal was justified in holding that the reassessment proceedings were unsustainable in law. The case pertained to the Assessment Year 2008-09, involving a company engaged in broadcasting and running a satellite television channel. Initially, the company declared a total income of ?65.37 crores, later revised to ?65.75 crores. The Assessing Officer determined the total income at ?65.88 crores through scrutiny assessment. Subsequently, the Assessing Officer issued a notice under Section 148 to reopen the assessment, citing underassessment due to the acquisition of film rights. The company contested the reopening, arguing that the issue had already been examined during the original assessment. The Assessing Officer and CIT(A) rejected the company's contention, leading to the matter reaching the Tribunal. The Tribunal found that the Assessing Officer had extensively scrutinized the issue during the original assessment, with no new material available for reassessment. The Tribunal highlighted specific questions raised by the Assessing Officer during the initial assessment related to the nature of the company's business and valuation methods. It noted that the Assessing Officer had received detailed responses from the company, indicating a thorough examination of the matter. The Tribunal concluded that the reassessment attempt was merely a change of opinion without fresh tangible material, rendering it invalid. The High Court referenced the Supreme Court's ruling in Commissioner of Income Tax Vs. Kelvinator of India Ltd., emphasizing that the concept of change of opinion still applies post-amendments in Section 147. The Court rejected the Revenue's argument that specific queries were not raised regarding the proposed disallowance during the original assessment. It differentiated between errors in the Assessing Officer's conclusions and situations where certain claims were not examined at all. Upholding the Tribunal's decision on the invalidity of reassessment, the Court dismissed the appeal, stating that no question of law arose, and declined to address the other merits issues. In conclusion, the High Court of Bombay dismissed the tax appeal, affirming the Tribunal's decision on the invalidity of the reassessment proceedings under Section 147 of the Income Tax Act, 1961.
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