2023 (11) TMI 37 - HC - Income Tax

Reopening of assessment u/s 147 - no specific details regarding the availability of MAT credit was submitted - HELD THAT - MAT credit as per return of income was Rs. 5,37,51,517/- whereas as per assessment order u/s 143(3) r.w.s 144C that the fact that MAT credit of Rs. 5,37,517 was granted. Therefore, all details were furnished and were verified. Copy of the audited accounts showing tax credit under Section 115JB gave details of the claim. What also was pointed out was that there was error in calculating and the reasons were factually incorrect. Evidently, the assessment year in question was assessment year 2012-13. Regular assessment u/s 143(3) was finalised on 23.03.2016. Four years had gone by from the end of the relevant period as the notice is dated 25.03.2019. There was therefore no failure on the part of the petitioner to disclose fully and truly all material facts necessary for the its assessment. Even from the record, it is evident that it is aptly demonstrated that as per statement of income MAT credit details were filed. No details or further inquiry was made on the claim. Having accepted the claim in absence of any other reason reassessment on the very issue was a change of opinion. There is therefore live link between the reasons recorded and formation of belief. Appeal of assessee allowed.

Summary

Issues:
The issues involved in the judgment are the validity of the notice issued under Section 148 of the Income Tax Act, 1961 for reopening the assessment for the A.Y. 2012-13 based on the petitioner's claim of MAT credit.

Details of the Judgment:

Issue 1: Validity of Notice under Section 148
The petitioner, a limited company, filed its return of income for the A.Y. 2012-13, which was finalized under Section 143(3) rws 144C of the Income Tax Act. Subsequently, the respondent issued a notice under section 148 of the Act dated 25.03.2019 to reopen the assessment for the same A.Y. Reasons for reopening were supplied, and objections raised by the petitioner were rejected by the respondent. The petitioner argued that the reasons for reopening were based on incorrect facts and no new tangible material was presented. The respondent, on the other hand, contended that there was a mismatch in the data regarding the MAT credit claimed by the petitioner.

Issue 2: Disclosure of Material Facts
The court observed that the MAT credit claimed by the petitioner was duly furnished and verified during the assessment process. The assessment order under section 143(3) read with Section 144C clearly showed that the MAT credit details were provided and there was no failure on the part of the petitioner to disclose material facts necessary for assessment. The court noted that the reasons for reopening were factually incorrect and that the reassessment on the same issue amounted to a change of opinion, as the claim had been accepted previously without further inquiry.

Conclusion:
After considering the submissions of both parties, the court found that the notice dated 25.03.2019 was unjustified and lacked a valid basis. The court quashed and set aside the notice, allowing the petition in favor of the petitioner. It was held that there was no cost imposed on the petitioner.