2023 (9) TMI 260 - HC - Income Tax

Reopening of assessment u/s 147 - Reasons to believe - reassessment beyond a period of four years - mistake in calculation of long term capital gain - HELD THAT - When the reasons supplied by the respondent are seen, there is no allegation of failure on part of the assessee to disclose fully and truly of material facts which particularly was the onus of the revenue since the reopening is undertaken beyond a period of four years from the end of the assessment year. The reasons, further would indicate that it was based on the very case records and as per the author of the reasons, they were self-explanatory, and therefore, no further inquiry was required in this case. Obviously therefore, there was no new tangible material based on which reasons for reassessment were taken. The order disposing of objections, therefore, would also fail again. From the notice and on the response that the petitioner filed it is evident that the same material which was accepted by the respondent, has been made a part of the revised reassessment regime by the impugned notice and the order disposing the objections. Decided in favour of assessee.

Summary

Issues Involved:
The issues involved in the judgment are the challenge to the order dated 22.03.2021 issued under Sec. 148 of the Income Tax Act and the disposal of objections in the order dated 09.02.2022.

Challenge to Order dated 22.03.2021:
The petitioner filed returns of income for Assessment Year 2015-16, later offering a revised computation of income due to a mistake in the calculation of long term capital gain. The Assessing Officer assessed the income at Rs. 51,62,600/-. Subsequently, a notice under Sec. 148 of the Act was issued, and objections were filed and disposed of.

Arguments by Petitioner:
The petitioner's counsel argued that the reopening was beyond the permissible period and without new tangible material. Detailed replies were filed previously, and the notice amounted to a change of opinion, impermissible under the law.

Arguments by Revenue:
The Revenue contended that the petitioner failed to disclose fully and truly all material facts during the assessment proceedings, justifying the reopening. The failure to disclose necessary material facts led to the notice under Sec. 148 r/w. Sec. 147.

Judgment:
The Court analyzed the reasons recorded for reopening and found that the same material had been considered during the original assessment. Detailed replies were filed and accepted by the Assessing Officer, indicating a change of opinion in issuing the notice. As there was no new tangible material, the reopening was based on audit objections and failed to meet legal requirements.

Conclusion:
The Court quashed and set aside the impugned notice dated 22.03.2021 and the order dated 09.02.2022, allowing the petition and making the rule absolute.