2019 (8) TMI 738 - HC - Income Tax

Reopening of assessment u/s 147 - change of opinion - HELD THAT - The Appellate Tribunal, as a last fact finding authority, has taken the view that the reopening is nothing, but change of opinion and there was no failure on the part of the assessee in disclosing all the necessary information for the purpose of making assessment. We take notice of the fact that the Tribunal has relied upon a decision of this Court in the case of Sadbhav Engineering Ltd vs. DCIT 2010 (7) TMI 521 - GUJARAT HIGH COURT We are convinced that no error, not to speak of any error of law could be said to have been committed in passing the impugned order. - Decided against revenue.

Summary

Issues:
1. Validity of reopening assessment under Section 148 of the Income Tax Act, 1961.
2. Consideration of change of opinion in reassessment proceedings.
3. Disposal of objection filed by the assessee.

Validity of Reopening Assessment:
The High Court considered an appeal by the Revenue against the order of the Income Tax Appellate Tribunal quashing the proceedings under Section 148 of the Income Tax Act, 1961 for the assessment year 2006-07. The Tribunal found that the assessment was reopened after the expiry of four years from the end of the relevant assessment year, and there was no failure on the part of the assessee to disclose all necessary information. The Tribunal observed that the reasons recorded for reopening did not mention any failure on the part of the assessee to disclose material facts. The Tribunal also noted that objections filed by the assessee were not disposed of by the Assessing Officer as required by legal precedents. Relying on the judgment in Sadbhav Engineering Ltd. vs. DCIT, the Tribunal held that the initiation of proceedings under Section 147 after the expiry of four years without any failure on the part of the assessee was not sustainable.

Consideration of Change of Opinion:
The Tribunal further held that the reopening of the assessment amounted to a change of opinion and that there was no failure on the part of the assessee to disclose all necessary information for assessment. Citing legal precedents, the Tribunal concluded that the reassessment proceedings were bad in law and quashed them. Consequently, the legal ground of the assessee was allowed, and the reassessment proceedings were deemed infructuous.

Disposal of Objection:
The Tribunal emphasized that the Assessing Officer failed to dispose of the objections filed by the assessee, contravening the directives laid down by the Honorable Supreme Court and the High Court. The failure to address the objections raised by the assessee was considered a procedural flaw in the reassessment process.

In the final judgment, the High Court upheld the decision of the Tribunal, stating that no error, especially no error of law, was found in the impugned order. Consequently, the appeal by the Revenue was dismissed, affirming the Tribunal's decision to quash the reassessment proceedings.