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2017 (2) TMI 396 - HC - Income TaxValidity of reopening of assessment - information received from the DDIT (Investigation) - over invoicing of the goods - Held that - From the material on record, it appears that it is not in dispute that on the basis of the information supplied /given by DRI who issued the show cause notice with respect to six consignments of the imported rough diamonds, more particularly, with respect to over invoicing of the goods original assessment was taken under scrutiny assessment. The Assessing Officer as such issued questionare to the petitioner assessee and thereafter considered the aforesaid and made some additions, and therefore, the entire issue with respect to the aforesaid six imported consignments of rough diamonds was in fact gone into by the Assessing Officer and considered in detail and thereafter the Assessing Officer framed the scrutiny assessment under Section 143(3) of the Act, and therefore, subsequent reassessment proceedings and /or reopening of the assessment on the very issue, more particularly, with respect to the consignment of the imported six rough diamonds can be said to be mere change of opinion. Considering the decision in the case of Kelvinator of India Ltd. (2010 (1) TMI 11 - SUPREME COURT OF INDIA ) merely on the basis of the change of opinion by the subsequent Assessing Officer / Assessing Officer reopening of the assessment is not permissible. - Decided in favour of assessee
Issues:
1. Validity of notice issued by Assessing Officer under Section 148 of the Income Tax Act for reopening assessment for Assessment Year 2009-10. 2. Whether conditions for reopening assessment beyond four years under Section 147 of the Act were satisfied. 3. Allegation of failure to disclose true and correct facts by the petitioner - assessee. 4. Jurisdiction of Assessing Officer to reopen assessment based on change of opinion. 5. Compliance with legal provisions and precedents in reassessment proceedings. Issue 1: Validity of Notice under Section 148: The petitioner sought to quash a notice issued by the Assessing Officer under Section 148 of the Income Tax Act to reopen the assessment for the Assessment Year 2009-10. The notice was challenged on the grounds that the income chargeable to tax had not escaped assessment and that the conditions for reopening beyond four years were not met. Issue 2: Conditions for Reopening Assessment: The Assessing Officer alleged that the petitioner failed to disclose true and correct facts, justifying the reopening of the assessment under Section 147 of the Act. The petitioner contended that the issue in question had already been scrutinized during the original assessment under Section 143(3) and that the reassessment was based on a change of opinion. Issue 3: Failure to Disclose Facts: The petitioner argued that there was no failure on their part to disclose relevant information, as the Assessing Officer had already considered the matter during the initial scrutiny assessment. The petitioner contended that the reassessment was unjustified and amounted to a mere change of opinion by the Assessing Officer. Issue 4: Jurisdiction and Change of Opinion: The Assessing Officer claimed that the petitioner did not disclose the show cause notice issued by the Directorate of Revenue Intelligence (DRI), leading to the reassessment. However, the court found that the issue had been thoroughly examined during the original assessment, making the reassessment a case of impermissible change of opinion. Issue 5: Compliance with Legal Provisions: The court, relying on legal precedents including the case of Commissioner of Income-tax Vs. Kelvinator of India Ltd., held that the reassessment based on the same material already considered during the original assessment was not permissible. Consequently, the court quashed the impugned notice and the reassessment proceedings for the Assessment Year 2009-10, ruling in favor of the petitioner. This detailed analysis covers the validity of the notice issued under Section 148, compliance with legal provisions for reopening assessments, allegations of failure to disclose facts, jurisdiction of the Assessing Officer, and the court's decision based on legal precedents and the specific circumstances of the case.
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