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2024 (11) TMI 30 - HC - Income TaxReopening of assessment u/s 147 - Reasons to believe - tax the transaction of sale of land as income from profit and gains - scope of change of opinion - notice is issued within a period of four years - HELD THAT - It is not in dispute that the very same transaction which is the subject matter of the reasons recorded i.e sale of agricultural land for consideration being share of the petitioner is the subject matter of scrutiny during the regular assessment by the AO and the entire details have been placed on record by the assessee during the course of the regular assessment. Merely because the impugned notice is issued within a period of four years of the date of assessment order, it cannot be said that the respondent can assume jurisdiction on the same facts having different opinion and therefore, in facts of the case, it is apparent that there is a mere change of opinion on part of the respondent AO to reopen the assessment which is not tenable in law as held in case of Commissioner of Income tax v. Kelvinator of India Ltd. 2010 (1) TMI 11 - SUPREME COURT wherein held AO has no power to review; he has the power to re-assess. But re-assessment has to be based on fulfillment of certain pre-condition and if the concept of change of opinion is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of change of opinion as an in-built test to check abuse of power by the AO. Decided in favour of assessee.
Issues:
Challenge to notice under section 148 of the Income Tax Act, 1961 for Assessment Year 2016-2017. Detailed Analysis: The petitioner challenged a notice dated 28.03.2021 issued under section 148 of the Income Tax Act, 1961 for Assessment Year 2016-2017. The petitioner, an individual assessed under PAN: AEZPP9756P, filed the original return of income on 29.03.2017 declaring total income of Rs. 34,32,466. The case was selected for scrutiny assessment, and notices were issued under sections 143(2) and 142(1) of the Act. The petitioner responded to these notices through a Chartered Accountant, providing details regarding sale of agriculture land, source of investments, and other income. The Assessing Officer accepted the returned income and framed the assessment under section 143(3) on 06.12.2018. Subsequently, a notice under section 148 was issued on 28.03.2021, alleging that income chargeable to tax had escaped assessment. The petitioner challenged this notice, arguing that it was a change of opinion by the Assessing Officer to tax the transaction of sale of land as income from profit and gains. The petitioner contended that the Assessing Officer had scrutinized the sale of agricultural land during the regular assessment, and after considering all documents submitted by the petitioner, had accepted the return income and computation of capital gain. The petitioner argued that the impugned notice was a change of opinion by the Assessing Officer and lacked jurisdiction. On the other hand, the Respondent's counsel argued that the petitioner had an alternative remedy through appeal before the CIT (Appeals) if an addition was made in reassessment proceedings. The Respondent also contended that the petitioner was not entitled to claim capital gain under section 54B of the Act as the property was sold as non-agricultural land, and the petitioner's status as an agriculturist was wrongly considered. The Court considered the facts and reasons recorded, noting that the same transaction was scrutinized during the regular assessment, and all details were provided by the petitioner. The Court cited the decision in Commissioner of Income tax v. Kelvinator of India Ltd., emphasizing that post-1st April 1989, the power to re-open assessments is wider but must be based on a reason to believe income has escaped assessment, not a mere change of opinion. Therefore, the Court quashed and set aside the notice dated 28.03.2021 issued under section 148 of the Act, ruling in favor of the petitioner. The petition was disposed of, and no costs were awarded.
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