2022 (12) TMI 174 - AT - Income Tax

Validity of reopening of assessment u/s 147 - whether any new or tangible material came to the notice of the Assessing Officer to verify the same or not? - HELD THAT - Considering the landmark judgement of the Hon ble Supreme Court in the case of CIT v. Kelvinator India Ltd. 2010 (1) TMI 11 - SUPREME COURT CIT(A) has held that the reopening is bad in law and quashed the reassessment order passed by the Assessing Officer. In view of the judgement of the Hon ble Supreme Court in the case of CIT v. Kelvinator India Ltd. (supra) as well as the judgement of the Hon ble Jurisdictional High Court in the case of TANMAC India v. DCIT. 2017 (1) TMI 122 - MADRAS HIGH COURT we find no reason to interfere with the order passed by the ld. CIT(A). Accordingly, the ground raised by the Revenue is dismissed.

Summary

Issues Involved:
Validity of reopening of assessment based on new or tangible material.

Analysis:
The appeal pertains to the reopening of assessment for the assessment year 2008-09. The Revenue's appeal was delayed due to the COVID-19 pandemic, which was condoned. The primary issue was whether the reopening of the assessment was valid. The Assessing Officer reopened the assessment under section 147 of the Income Tax Act, based on the grounds that the assessee had not paid self-assessment tax, raised provisions for expenses and bad debt not added to total income, and omitted foreign exchange loss from the income. The key contention was that no new or tangible material was presented to justify the reopening, indicating a change of opinion rather than valid grounds for reassessment.

The assessee challenged the reopening before the CIT(A), arguing that there was no tangible material for reassessment. The CIT(A) agreed, citing the Supreme Court's judgment in CIT v. Kelvinator India Ltd., which emphasized the need for new or tangible material for reopening assessments. The Revenue appealed to the Tribunal, supported by the DR, while the assessee's counsel relied on the Kelvinator case to uphold the CIT(A)'s decision.

The Tribunal analyzed the facts, noting that the Assessing Officer's decision to reopen was solely based on existing records without any new material. The Tribunal referenced the Madras High Court case of TANMAC India v. DCIT, which echoed the principles of the Kelvinator case. The Tribunal concurred with the lower authorities, concluding that the reopening lacked valid grounds and was akin to a change of opinion, contravening legal precedents. Therefore, the Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision to quash the reassessment order.

In light of the legal principles established by the Supreme Court and the Jurisdictional High Court, the Tribunal found no reason to interfere with the CIT(A)'s order. Consequently, the Tribunal dismissed the Revenue's appeal, affirming the decision to quash the reassessment order.