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2014 (8) TMI 797 - AT - Income TaxReopening of assessment u/s 147 Notice issued u/s 148 Disallowance u/s 14A - Held that - The issue of disallowance u/s. 14A was duly considered by the AO in the original assessment and that the AO formed a view after consideration that the amount so disallowable u/s. 14A is to be taken at ₹ 1,54,559 - Following the decision in RECKITT BENCKISER HEALTHCARE INDIA LTD Versus ASSISTANT COMMISSIONER OF INCOME TAX 2013 (8) TMI 523 - GUJARAT HIGH COURT - even within a period of four years assessment cannot be reopened - Any permission to the AO to do so would amount to permitting change of opinion - to correct the assessment order passed after a detailed examination by the AO, the succeeding AO cannot resort to the proceedings of reopening - the remedy for mistakes of the AO, if any, may be available under other provisions of the Act, but certainly review of the very same material by the succeeding AO to take a different view is not available with the AO in the garb of reassessment - the reopening of the reassessment in the is unsustainable Decided in favour of Assessee.
Issues:
Cross appeals filed by Assessee and Revenue against Commissioner of Income Tax (Appeals) order. Analysis: 1. Ground no. 1 - Invocation of provisions of section 148 of the Act: The Assessee challenged the validity of reopening the assessment under section 148 of the Act. The original return of income claimed expenses disallowed under section 14A at Rs NIL. The Assessing Officer had disallowed Rs 1,54,559 under section 14A in the original assessment. The assessment was reopened on 15.03.2010, and a larger amount of Rs 30,91,180 was disallowed under section 14A. The Assessee argued that the reopening was based on a change of opinion and not valid as per the decision of the Bombay High Court. The Departmental Representative relied on the order of the Commissioner of Income Tax (Appeals). 2. Validity of Reopening Assessment: The Assessee contended that the reopening was bad in law as it was based on a change of opinion by the succeeding Assessing Officer. Citing the decision of the Gujarat High Court, the Assessee argued against the validity of the reasons recorded for reopening. The Tribunal noted that the issue of disallowance under section 14A was already considered in the original assessment, and the reassessment was based on the same materials to increase the disallowance amount. 3. Legal Precedents and Interpretation: The Tribunal referred to various legal precedents, including the decision of the Mumbai Special Bench of the Tribunal, the Supreme Court's approval of the Delhi High Court's decision, and judgments of the Delhi High Court and Jurisdictional High Court. These decisions emphasized the importance of tangible material for reassessment and the concept of "change of opinion" as a test to prevent abuse of power by the Assessing Officer. 4. Decision and Conclusion: The Tribunal concluded that the reassessment in this case was unsustainable and bad in law. Citing the decision of the Jurisdictional High Court, the Tribunal held that the reassessment based on the same material to take a different view was not permissible. Therefore, the impugned reassessment order was canceled. Consequently, since the first ground of appeal was allowed, the other grounds of appeal from both the Assessee and Revenue became infructuous and were dismissed. The appeal of the Assessee was allowed, and that of the Revenue was dismissed.
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