2019 (2) TMI 999 - HC - Income Tax

Reopening of assessment - assessment beyond a period of four years from the end of the relevant assessment year - claim of deduction under section 80IB - change of opinion - Held that - Having regard to the submissions advanced by the learned advocate for the petitioner, Issue Notice returnable on 4th February, 2019 By way of ad-interim relief, the respondent is permitted to proceed further pursuant to the impugned notice; he, however, shall not pass the final order without the permission of this court. Direct Service is permitted today.

Summary

Issues involved:
Reopening of assessment under section 147 of the Income Tax Act, 1961 based on non-fulfillment of conditions of section 80IB(10) for claiming deduction, validity of jurisdiction of Assessing Officer, applicability of proviso to section 147, challenge to assumption of jurisdiction, change of opinion as a ground for reopening assessment.

Analysis:

1. The petitioner's advocate highlighted that the Assessing Officer sought to reopen the assessment based on the petitioner's alleged failure to fulfill the conditions of section 80IB(10) of the Income Tax Act, 1961, specifically regarding the buyers being spouses. The petitioner had previously submitted all relevant documents, including a statement detailing the buyers of the project in question, during the scrutiny assessment. It was argued that as the Assessing Officer had already examined and approved the claim of deduction under section 80IB, the reopening of the assessment was based on a mere change of opinion rather than new material facts.

2. The petitioner contended that the assessment was being reopened beyond the stipulated four-year period from the end of the relevant assessment year, triggering the proviso to section 147 of the Act. As per the petitioner, there was no failure on their part to provide all necessary material facts for assessment. Additionally, it was highlighted that the Assessing Officer had abandoned the objection of non-disclosure of material facts in the order disposing of objections. This raised concerns about the validity of the jurisdiction exercised by the Assessing Officer under section 147 of the Act.

3. Considering the arguments put forth by the petitioner's advocate, the court issued a notice returnable on a specified date. As an interim measure, the respondent was permitted to proceed further based on the impugned notice, with a condition that the final order should not be passed without the court's permission. Direct service of the notice was also permitted on the same day to ensure timely communication of the court's decision.

This comprehensive analysis of the judgment addresses the key issues involved in the legal matter, focusing on the grounds for reopening the assessment, challenges to the jurisdiction of the Assessing Officer, and the application of relevant provisions of the Income Tax Act, 1961.