2019 (11) TMI 464 - HC - Income Tax

Reopening of assessment - assessment reopened on the basis of change of opinion - one time settlement by the Petitioner with its bankers - HELD THAT - We find that both the CIT(A) and the Tribunal have found on facts that during the regular assessment proceedings, the Assessing Officer had occasion to consider the one time settlement by the Petitioner with its bankers. It found that during the scrutiny assessment proceedings, queries were raised and the Petitioner filed a detailed response on 11th November, 2008, giving complete details to Assessing Officer of the one time settlement and manner in which it was treated. This finding of fact is not shown to be perverse in any manner. The re-opening notice is not based on any fresh tangible material but proceeds on the material already on record with the Assessing Officer and also considered before passing the order dated 24th November, 2008 under Section 143(3) of the Act. Assessing Officer restricts himself only to deal with those issues where he does not agree with the Assessee s submission and gives reasons for it. Otherwise, it would be impossible to complete all the assessments within time limit available. Thus, the Court held that once a query is raised during Assessment Proceedings and the Assessee has responded to the query, to the satisfaction of the Assessing Officer, then there has been due consideration of the same. Therefore, issuing of the re-opening notice on the same facts which were considered earlier, clearly amounts to change of opinion. Thus, without jurisdiction. - Decided against revenue.

Summary

Issues Involved:
Challenge to order of Income Tax Appellate Tribunal on reopening of assessment for Assessment Year 2006-07 based on change of opinion.

Analysis:
1. The Respondent, engaged in manufacturing and consultancy, filed its return for the subject year, which was accepted as a 'Nil' return by the Assessing Officer.
2. Subsequently, a notice was issued under Section 148 of the Income Tax Act in 2011 to re-open the assessment based on certain financial transactions. The Respondent objected, citing 'change of opinion,' but the Assessing Officer proceeded to add a sum to the income of the Respondent.
3. The Commissioner of Income Tax (Appeals) found that the issue in question had been deliberated upon during the initial assessment proceedings, and the re-opening notice was without jurisdiction as it was based on a mere change of opinion.
4. The Revenue appealed to the Tribunal, which noted that the issue had been considered during the initial assessment, and the re-opening notice lacked proper consideration by the Assessing Officer, being solely based on an audit objection.
5. The Tribunal upheld the view that the re-opening notice was without jurisdiction, as it was a mere change of opinion without fresh tangible material.
6. The Court dismissed the Appeal, emphasizing that once an issue has been raised and responded to during assessment proceedings, re-opening the assessment on the same grounds amounts to a change of opinion and is without jurisdiction.

This detailed analysis of the judgment highlights the procedural and legal aspects involved in challenging the order of the Income Tax Appellate Tribunal on the reopening of assessment for the specified year, focusing on the concept of 'change of opinion' and the necessity for fresh tangible material to justify such actions.