2023 (1) TMI 961 - AT - Income Tax

Reopening of assessment u/s 147 - denying the claim of deduction u/s. 80IA(4) - HELD THAT - It is very clear from the original assessment proceedings, AO vide his notice u/s. 142(1) dated 19.01.2011 requested the assessee to submit copy of the stock statement furnished to the bank to avail cash credit facility by the assessee. The assessee submitted the details to the AO vide its reply enclosed the copies of the stock which is clearly mentioning 52.66 lakhs. AO has examined the issue of stock, during the original assessment proceedings and do not find any discrepancy in the stock submitted by the assessee and completed the assessment order u/s. 143(3) of the Act. It is settled principle of law, no assessment can be reopened on the basis of change of opinion - Decided against revenue.

Summary

Issues:
Reopening of assessment proceedings under section 147 of the Income Tax Act, 1961 based on alleged concealed income due to differences in stock figures.

Detailed Analysis:

1. Reassessment based on Stock Discrepancy:
The appeal was filed by the Revenue against the Appellate Order dated 28.08.2020 passed by the Commissioner of Income Tax (Appeals)-2, Bhopal, regarding the re-assessment order under section 147 r.w.s. 143(3) of the Income Tax Act, 1961 for the Assessment Year 2009-10. The initial assessment denied the deduction under section 80IA(4) and determined the total income as Rs. 1,27,33,201-. The reassessment was initiated due to a discrepancy in the stock figures, where the stock shown in the books differed from the stock statement submitted to the bank, leading to an alleged concealed income of Rs. 37.66 lakhs.

2. Change of Opinion and Legal Precedents:
The assessee contended that the reassessment was a mere change of opinion as the stock statement submitted to the bank had been presented during the original assessment proceedings. The Commissioner of Income Tax (Appeals) held that the initiation of reassessment proceedings based on the stock difference was invalid in law, citing various judicial rulings on change of opinion. The Ld. CIT(A) referred to the ITAT Indore Bench's decision in a similar case and a Supreme Court judgment to support the invalidity of the reassessment.

3. Arguments and Counterarguments:
The Revenue challenged the Ld. CIT(A)'s decision, arguing that the reassessment was based on facts leading to concealed income and that the notice under section 148 was justified. The Senior D.R. supported the Assessing Officer's order and requested to uphold it. On the contrary, the A.R. for the assessee presented evidence from the original assessment proceedings to demonstrate that the Assessing Officer had already examined the stock issue and found no discrepancies, making the reassessment a change of opinion.

4. Judicial Precedent and Dismissal of Appeal:
After thorough consideration, the ITAT Indore members analyzed the legal principles involved. They referenced a Supreme Court judgment that emphasized no reassessment based on a change of opinion. Following the Constitutional Bench Judgment, the ITAT upheld the Ld. CIT(A)'s decision, stating that the Revenue failed to provide sufficient grounds to interfere. Consequently, the appeal filed by the Revenue was dismissed on 03-01-2023.

This detailed analysis covers the issues related to the reassessment based on stock discrepancies and the legal arguments regarding change of opinion, supported by relevant judicial precedents, leading to the ultimate dismissal of the Revenue's appeal.