2013 (12) TMI 14 - HC - Income Tax

Reassessment u/s 147 - Held that - Earlier the assessment was being made in the capaty of HUF - Later on the reassessment was started in the capacity of AOP - The assessee has disclosed all the material facts and on the basis the assessment had been made - No relevant material was brought by the A.O. for changing the status - As per the CBDT Circular No.549 dated 31.10.1989 - When no new material was brought on record before changing the status then it amounts to change of opinion which cannot be a ground for re-assessment - Following CIT Vs. Kalvinator of India 2002 (4) TMI 37 - DELHI High Court - There must be some tangible new material before changing the status - The same is absent in the instant cases - Decided in favour of assessee.

Summary

Issues:
Appeals filed by the Department under Section 260A of the Income-tax Act against judgments of the Income Tax Appellate Tribunal for assessment years 1996-97, 1997-98, and 1998-99.

Analysis:
The appeals were consolidated due to identical facts and circumstances. The substantial questions of law admitted by the Coordinate Bench of the Court included issues related to the justification of the ITAT's decision, the levy of tax in correct hands, and the legality of the assumption of jurisdiction by the Assessing Officer. The case involved M/s Shiv Shakti Enterprises filing returns as HUF, leading to disputes over ownership of a property with another HUF. The Assessing Officer rejected the HUF claim and initiated proceedings under Section 147 for assessment years 1995-96 and 1996-97. The CIT(A) quashed the assessment orders, considering them as a "change of opinion."

The Department appealed to the Tribunal, which upheld the CIT(A)'s decision, leading to further appeals. The Department argued that taxable income should be taxed in the correct hands, which the A.O. had done by assessing income in Sri Gautam Rastogi's individual capacity. The Court noted the absence of new material justifying the change in status, deeming it a "change of opinion" not permissible under the law. Citing precedents like CIT Vs. Kalvinator of India and Tech Spon India Vs. ITO, the Court upheld the Tribunal's decision, stating that no interference was warranted when both appellate authorities concurred on the facts of the case.

Ultimately, the Court ruled in favor of the assessee, dismissing the department's appeals. The judgment emphasized the importance of tangible new material to support changes in assessment status and highlighted the need for proper legal grounds for reassessment, as per established legal principles and precedents.

This detailed analysis of the judgment showcases the key legal issues, arguments presented, and the Court's reasoning in arriving at its decision, providing a comprehensive overview of the case and its implications under the Income-tax Act.