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2022 (2) TMI 298 - HC - Income TaxReopening of assessment u/s 147 - Eligibility of reasons to believe - reopening beyond the periods of years - HELD THAT - Since the notice issued is after expiry of four years from the end of the relevant assessment year and assessment under Section 143(3) of the Act was completed, proviso to Section 147 of the Act shall apply. Respondent has to first show that there was failure on the part of petitioner to fulfill and there are non-disclosure of material facts required for assessment. As considered the reasons annexed at Exhibit F to the petition. In our view, respondent has miserably failed to disclose any facts, material or otherwise which has not been disclosed. In our view, first of all the reasons indicated change of opinion which is impermissible in law and secondly, the entire basis for re-opening is due to mistake of the Assessing Officer that resulted in under assessment. Hon ble Apex Court in Indian Eastern Newspaper Society 1979 (8) TMI 1 - SUPREME COURT has held that an error discovered on a reconsideration of the same material (and no more) does not give power to the Assessing Officer to re-open the assessment. - Decided in favour of assessee.
Issues:
Impugning notice under Section 148 of the Income Tax Act, 1961 for A.Y. 2012-13 and rejection of objections under Section 147 of the Act. Analysis: The petitioner challenged a notice issued under Section 148 of the Income Tax Act, 1961 for the assessment year 2012-13 and the subsequent rejection of objections under Section 147 of the Act. The High Court noted that the notice was issued after the expiry of four years from the end of the relevant assessment year, and the assessment under Section 143(3) of the Act was already completed. The proviso to Section 147 of the Act was deemed applicable, requiring the respondent to demonstrate a failure on the part of the petitioner to disclose material facts necessary for assessment. Upon reviewing the reasons provided with the petition, the Court found that the respondent failed to disclose any new facts that were not previously revealed. The Court observed that the reasons indicated a change of opinion, which is impermissible in law. Additionally, the basis for re-opening the assessment was attributed to a mistake made by the Assessing Officer resulting in under-assessment, which was not a valid ground for re-opening. The Court referred to a judgment by the Hon'ble Apex Court in Indian & Eastern Newspaper Society vs. Commissioner of Income-tax, emphasizing that an error discovered upon reconsideration of the same material does not grant the Assessing Officer the authority to re-open the assessment. Citing precedent cases, the Court highlighted that an error identified during a reassessment of the same material does not empower the Assessing Officer to reopen the assessment, contrary to the Revenue's contention. Furthermore, the Court mentioned a Full Bench judgment of the Karnataka High Court in Dell India (P.) Ltd. vs. Joint Commissioner of Income Tax, LTU, Bangalore, which supported the view that an error found upon reconsideration of the same material does not warrant the reopening of the assessment. Ultimately, the Court allowed the petition, granting the prayer clause to quash the impugned notice and order issued by the respondent. In conclusion, the petition was disposed of in favor of the petitioner, emphasizing the impermissibility of re-opening the assessment based on a change of opinion or a mistake made by the Assessing Officer, as highlighted in relevant legal precedents and judgments.
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