2019 (11) TMI 214 - HC - Income Tax

Reopening of assessment u/s 147 - reason to believe - HELD THAT - The attention of the court was invited to the detailed submission on the claim made under section 80IA(4) for the Assessment Year under consideration. It was pointed out that after considering the explanation given by the petitioner, the Assessing Officer has, in the Assessment Order dated 05.03.2015 passed under section 143(3) of the Act held that the petitioner fulfills all the conditions for deduction under section 80IA(4) of the Act. It was submitted that at the time of scrutiny assessment, the Assessing Officer has gone into the issue threadbare and hence, it is evident that the respondent seeks to reopen the assessment on a mere change of opinion. It was further pointed out that the assessment is sought to be reopened beyond a period of four years from the end of the relevant assessment year and that, in the absence of any failure on the part of the petitioner to fully and truly disclose all the material facts, the assumption of jurisdiction by the Assessing Officer under section 147 of the Act is without authority of law. Having regard to the submissions advanced by the learned advocate for the petitioner, issue Notice , returnable on 10th December 2019 . By way of ad-interim relief, further proceedings pursuant to the impugned notice dated 28.03.2019 issued by the respondent under section 148 of the Income Tax Act, 1961 for the Assessment Year 2012-13 are hereby stayed.

Summary

Issues Involved:
Reopening of assessment under section 147 of the Income Tax Act, 1961 beyond the statutory period of four years without failure to disclose material facts.

Analysis:

Issue 1: Reopening of assessment under section 147
The petitioner's advocate argued that the Assessing Officer's reason for reopening the assessment was based on the absence of a separate Profit and Loss Account and Balance Sheet of eligible business, which allegedly rendered the petitioner ineligible for deduction under section 80IB(4) of the Income Tax Act, 1961. The advocate highlighted that the petitioner had responded to a previous notice under section 142(1) of the Act, providing the necessary details regarding the claim of deduction under section 80IA. The Assessment Order dated 05.03.2015 had acknowledged the fulfillment of conditions for deduction under section 80IA(4) by the petitioner, indicating that the issue had already been scrutinized and addressed during the assessment process. The advocate contended that the attempt to reopen the assessment was merely a change of opinion by the Assessing Officer.

Issue 2: Reopening beyond the statutory period
The petitioner's advocate further argued that the assessment was being reopened beyond the statutory period of four years from the end of the relevant assessment year. The advocate asserted that there was no failure on the part of the petitioner to disclose all material facts, making the assumption of jurisdiction by the Assessing Officer under section 147 of the Act legally unfounded. The advocate emphasized the absence of any non-disclosure or misrepresentation of material facts by the petitioner, challenging the validity of the Assessing Officer's decision to reopen the assessment under section 147.

The court, considering the submissions made by the petitioner's advocate, issued a Notice returnable on 10th December 2019. Additionally, as an interim measure, the court stayed further proceedings related to the impugned notice dated 28.03.2019 issued by the respondent under section 148 of the Income Tax Act, 1961 for the Assessment Year 2012-13, allowing for direct service.