2018 (9) TMI 1473 - HC - Income Tax

Reassessment proceedings u/s 147 - change of opinion - non disclosure of provision for bad debts and doubtful debts and interest income - Held that - Tribunal has correctly recorded a factual finding that the Assessee has disclosed the figure of provision for bad debts and doubtful debts and interest income also in the Profit and Loss Account submitted along with the return of income. Therefore, the Tribunal held that there is no failure on the part of the Assessee to disclose fully and truly all material facts. Furthermore, it was pointed out that the figures and reasons for reopening were picked up from the assessee s accounts submitted along with return The reopening was a change of opinion. When there is no allegation that the Assessee is not fully and truly disclosed all the materials, the question of reopening the assessment does not arise. The duty of the Assessee rests only to fully and truly disclose all facts in the return, which has been done by the respondent/Assessee. It is not for the respondent/Assessee to tell the Assessing Officer has to how he has to frame the assessment and in the instant case, it is evidently clear that the reopening was because of change of opinion. - decided in favour of assessee

Summary

Issues:
1. Appeal against the order passed by the Income Tax Appellate Tribunal regarding reassessment under Section 147 of the Income Tax Act, 1961 for the Assessment Year 1998-1999.

Analysis:
The High Court considered the substantial question of law raised in the appeal, which questioned the correctness of the Tribunal's decision on the legality of the reassessment under Section 147. The Court noted that the Tribunal had found no failure on the part of the Assessee to fully disclose all material facts, as the figures for reopening were derived from the Assessee's accounts submitted with the return. Relying on the decision in CIT V Elgi Finance Ltd., the Tribunal held that the assumption of jurisdiction for reassessment in this case was time-barred. The Court agreed with the Tribunal's view, emphasizing that the reopening was a mere change of opinion without any evidence of non-disclosure by the Assessee. The Court reiterated that the Assessee's duty is to fully and truly disclose all facts in the return, which was done in this instance. The Court concluded that the Tribunal's order was correct, dismissing the Revenue's appeal and ruling in favor of the Assessee on the substantial question of law. No costs were awarded in the judgment.