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2016 (8) TMI 683 - AT - Income TaxReopening of assessment - change of opinion - Held that - Notice under section 148 was issued upon the assessee after the expiry of four years from the end of the assessment year. The proviso appended to section 147 of the Income Tax puts an embargo upon the power of the AO to issue notice under section 148 in the cases, where, scrutiny assessment was made and four years have expired after the end of the relevant assessment year. He cannot issue notice in such cases unless it is established that income chargeable to tax has escaped on account of failure of the assessee to disclose all material facts fully and truly. A perusal of the reasons would nowhere show that the AO has made out his case exhibiting the fact that the assessee has failed to disclose any material particulars fully and truly regarding assessment of its income. The ld.CIT(A) has made a detailed analysis of the facts already disclosed by the assessee, and thereafter, recorded a finding that the AO has sought to reopen the assessment on the basis of change of opinion. After going through the well reasoned order of the ld.CIT(A), in the light of various authoritative pronouncements, we are of the view that no interference is called in the order of the ld.CIT(A). Accordingly, appeal of the Revenue is dismissed.
Issues Involved:
1. Quashing of reassessment order by CIT(A). 2. Validity of reopening of assessment under Section 147 of the Income Tax Act. 3. Disclosure of material facts by the assessee. Detailed Analysis: 1. Quashing of Reassessment Order by CIT(A): The Revenue appealed against the CIT(A)'s order, which quashed the reassessment order. The CIT(A) found that the original assessment proceedings had already addressed the issue of long-term capital gain. The assessee had disclosed all relevant facts in a note dated 24.12.2007, which was considered during the original assessment. The CIT(A) concluded that the reassessment was based on a change of opinion and not due to any failure on the part of the assessee to disclose material facts, thus rendering the reopening of the assessment invalid. 2. Validity of Reopening of Assessment under Section 147 of the Income Tax Act: The Tribunal examined whether the reopening of the assessment under Section 147 was valid. It noted that the reasons recorded by the AO for reopening the assessment were based on a reappreciation of figures already disclosed by the assessee during the original assessment. The AO did not obtain any new information from external sources post-assessment. The Tribunal emphasized that for reopening an assessment after four years, it must be established that the income escaped due to the assessee's failure to disclose material facts fully and truly. The Tribunal found that the AO failed to demonstrate such failure by the assessee. 3. Disclosure of Material Facts by the Assessee: The Tribunal reviewed the reasons recorded by the AO, which did not indicate any failure by the assessee to disclose material facts fully and truly. The AO had merely re-evaluated the details provided by the assessee during the original assessment. The Tribunal referred to various judicial precedents, including decisions by the Hon’ble Supreme Court and High Courts, which held that reopening of assessment based on a mere change of opinion is not permissible. The Tribunal concluded that the reassessment was invalid as it was not based on any new tangible material but was merely a reconsideration of the same facts previously examined. Conclusion: The Tribunal upheld the CIT(A)’s decision to quash the reassessment order, affirming that the reopening of the assessment was invalid as it was based on a change of opinion without any new material evidence. The appeal by the Revenue was dismissed. Order Pronounced: The order was pronounced in the Court on 14th June 2016 at Ahmedabad.
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