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2024 (3) TMI 723 - AT - Income TaxReopening of assessment u/s 147 - Case reopened after the lapse of a period of four years - change of opinion - eligibility for deduction u/s. 80IA - HELD THAT - On a perusal of the assessment record, it transpires that as per the reasons to believe, the view taken by the A.O while framing the original assessment vide his order u/s. 143(3) dated 17.04.2012 had been revisited based on a mere change of opinion of the successor A.O as against that of his predecessor. On a perusal of the record, it can safely be gathered that the reopening of the concluded assessment of the assessee was based on the same set of facts as were available with the A.O. while framing the original assessment. To sum up, no fresh material/document had come in the possession of the A.O. after the culmination of the original assessment proceedings, which would have vested jurisdiction with him to reopen the concluded assessment of the assessee. Our aforesaid conviction is duly fortified on a bare perusal of the reasons to believe , which reveals that the reopening of the concluded assessment of the assessee was based on a mere re- appreciation of the facts available on record by the successor A.O. DR on being confronted with the aforesaid factual position could not rebut the same. A.O. had traversed beyond the scope of his jurisdiction and had wrongly reopened the concluded assessment of the assessee under Sec. 147 of the Act. We are unable to comprehend what new material or information had come up before the A.O., which justified the reopening of the concluded assessment of the assessee. We are afraid that re-appreciation of the facts already available on record before the A.O. while framing the original assessment is not permissible u/s 147. It would be relevant to point out that the view taken by the Full bench of the Hon ble High Court of Delhi in CIT Vs. Kelvinator of India 2002 (4) TMI 37 - DELHI HIGH COURT that the failure of the A.O to consider certain material that was available on record while framing the original assessment cannot justify the reopening of his concluded assessment, as the same would amount to opening of the assessment based on a change of opinion , which is not allowed as per the mandate of law, had thereafter been approved by the Hon ble Apex Court in CIT Vs. Kelvinator of India 2010 (1) TMI 11 - SUPREME COURT . On careful perusal of the original assessment framed by the A.O vide his order passed u/s. 143(3) dated 17.04.2012 reveals that he had at length deliberated upon the assessee's claim for deduction u/s. 80IA of the Act and only after found it in order had accepted the same. Also, the A.O. had looked into the assessee's claim for depreciation on various assets and as is discernible from the assessment order, had partly disallowed his claim for depreciation on motor cars. Considering the aforesaid facts, we are of a firm conviction that it is not only a case that no fresh material had come to the notice of the A.O after the culmination of the original assessment which would reveal any income of the assessee chargeable to tax had escaped assessment, but in fact, is a case where the assessee's claim for deduction u/s. 80IA of the Act as well as depreciation was looked into by the A.O. while framing the original assessment and were allowed after necessary deliberations. We, thus, concur with the contention of the Ld. AR that as the concluded assessment of the assessee had been reopened based on a mere change of opinion , therefore, the same had rightly been struck down on the said count itself by the first appellate authority. Scope of the 1st proviso to Sec. 147 - We are unable to comprehend what facts the assessee had failed to disclose which would have otherwise justified bringing his case within the realm of the extended period contemplated in the 1st proviso of section 147 of the Act. As the assessee had disclosed fully and truly all the material facts as were necessary for his assessment for the year under consideration, i.e., AY 2010-11; therefore, it could by no means be held to be in default to bring it within the sweep of 1st proviso of Section 147 of the Act. Thus we concur with the contention of the Ld. AR that the assessment of the assessee for AY 2010-11 that was earlier framed under Sec. 143(3), dated 17.04.2012, dehors any failure on his part to fully and truly disclose all material facts necessary for his assessment could not have been reopened by the AO vide Notice u/s 148, dated 31.03.2016, i.e, after the expiry of four years from the end of the relevant assessment year. Decided in favour of assessee.
Issues Involved:
1. Validity of reassessment under \u/s 148/143(3) of the Income Tax Act, 1961. 2. Disallowance of deduction claimed under \u/s 80IA. 3. Disallowance of depreciation claimed on bio gas plant. 4. Whether reassessment was based on a mere change of opinion. Summary: Issue 1: Validity of Reassessment under \u/s 148/143(3) The Tribunal examined whether the reassessment was validly initiated. The original assessment for A.Y. 2010-11 was completed on 17.04.2012, and the reassessment notice was issued on 31.03.2016, beyond the four-year limit. The CIT(A) quashed the reassessment, noting that the AO did not establish any failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. The Tribunal upheld this decision, emphasizing that the reassessment was based on a mere reappreciation of facts already available during the original assessment, which constitutes a change of opinion and is not permissible under the law. Issue 2: Disallowance of Deduction Claimed under \u/s 80IA The AO disallowed the deduction claimed under \u/s 80IA for carbon credit income, arguing it was ancillary and not directly derived from power generation. The CIT(A) found that the AO had already examined this issue during the original assessment and had accepted the claim. The Tribunal agreed, noting that the reassessment was based on a change of opinion without any new material, thus invalidating the reassessment. Issue 3: Disallowance of Depreciation Claimed on Bio Gas Plant The AO also disallowed depreciation on the bio gas plant, arguing that no plant and machinery were required to earn carbon credit. The CIT(A) observed that the AO had previously examined and accepted the depreciation claim during the original assessment. The Tribunal concurred, stating that the reassessment on this ground was also based on a change of opinion. Issue 4: Reassessment Based on Mere Change of Opinion The Tribunal reiterated that reassessment based on a mere change of opinion is not permissible. It cited several judicial pronouncements, including the Supreme Court's decision in CIT vs. Kelvinator of India Ltd., to support its conclusion. The Tribunal found that the AO's reasons for reopening the assessment were based on reappreciating existing facts rather than any new information, thus constituting a change of opinion. Conclusion: The Tribunal dismissed the revenue's appeals for both A.Y. 2010-11 and A.Y. 2012-13, upholding the CIT(A)'s orders quashing the reassessments for lack of valid jurisdiction and for being based on a mere change of opinion.
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