9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (7) TMI 612 - AT - Income TaxReopening of assessment u/s 147 - validity of reasons to believe - addition on account of suppression of rental income, disallowance of expenditure and undisclosed income - HELD THAT - The said details were available while completing the assessment u/s. 143(3). It is imperative on the part of the Assessing officer to show that the conditions specified in the first proviso to sec. 147 are complied with before initiating the reassessment proceedings. AO has failed to show that there was failure on the part of the assessee to disclose fully and truly all material facts. Hence, the reassessment proceeding under section 147 has not been validly initiated because the same has been initiated merely on a change of opinion without any fresh material coming into the possession of the AO - The reason must have live link with the formation of the belief. But in the present case, the materials facts which emerged for reopening the assessment u/s. 147 of the Act, that were available during the original assessment. The view of the various Courts is that even after amendment of section 147, mere change of opinion does not confer jurisdiction on the Assessing officer to initiate proceedings for reassessment merely by resorting to Explanation 1 on the basis of change of opinion. reopening of the assessment is bad in law and hence, liable to be quashed. - Decided in favour of assessee.
Issues:
Appeal against CIT(A) order confirming notice u/s. 148 for reopening assessment u/s. 147. Analysis: 1. The appeal was filed against the CIT(A)'s decision confirming the notice issued under section 148 for reopening the assessment under section 147. The assessee contested that the Ld. CIT(A) erred in confirming the notice, which led to an addition of ?3,07,500. 2. The assessee, an individual deriving income from sales of petrol, diesel, and lubricants, initially reported a total income of ?2,84,100 for the assessment year 2009-2010. The Assessing Officer later completed the assessment under section 143(3) of the Act, determining the total income at ?6,96,160. This included additions for suppression of rental income, disallowance of expenditure, and undisclosed income. 3. The Assessing Officer issued a notice under section 148 for reopening the assessment under section 147, citing various discrepancies leading to an alleged escapement of income. The assessee challenged this reopening, arguing that all necessary documents and records were provided during the original assessment, and thus, there was no valid reason for the reassessment. 4. The Assessing Officer proceeded with the reassessment under section 144/147, making further disallowances. The assessee appealed this decision, which was partly confirmed by the CIT(A), leading to the current appeal before the Tribunal. 5. The Ld. A.R. of the assessee contended that the reassessment was merely a change of opinion by the AO and not based on fresh material. Citing relevant judicial precedents, the A.R. argued that the reassessment lacked a valid reason to believe that income had escaped assessment, as all relevant information was already provided during the original assessment. 6. The Tribunal, after considering the arguments, observed that the Assessing Officer failed to demonstrate any failure on the part of the assessee to disclose material facts fully and truly. The reassessment was deemed invalid as it was initiated solely on a change of opinion without any new material. The Tribunal emphasized the necessity for a tangible material forming the basis of belief for income escapement, as established by Supreme Court rulings. 7. The Tribunal concluded that the reassessment was legally flawed and subsequently quashed the notice issued under section 148 and the reopening of the assessment under section 147. Consequently, the appeal of the assessee was allowed. In summary, the Tribunal ruled in favor of the assessee, holding that the reassessment was invalid due to being based on a mere change of opinion without fresh material. The Tribunal emphasized the importance of a valid reason to believe income escapement for initiating reassessment proceedings under section 147.
|
