INCOME TAX ACT, 1961

Section 148

Reassessment - Validity - Absence of any new facts or law coming to notice of AO -

Assessee was issued notice for reopening of assessment under section 148 after the regular assessment was completed under section 143(3). AO alleged that assessee had debited on account of management training expenses incurred for post-graduate programme in management by Indian School of Business on the ground that such expenditure was of personal nature and not an expenditure for business purpose. There was no details submitted proving nexus between the expense of course fees and the relevance of the same wholly and exclusively for business purpose. AO formed the reasonable belief that income chargeable to tax had escaped assessment. CIT(A) and Tribunal upheld the order of AO. Held: It was evident that at the time of scrutiny assessment AO had duly considered this issue in detail and upon being satisfied with regard to the nexus between the expenses incurred by assessee for the management training of its Director and the business of the petitioner, had allowed such expenditure. Admittedly, no fresh material/information was obtained by AO as the same did not find a mention in the reasons recorded in support of notice and was a change of opinion. In the case, prima facie assessee had shown absence of any new facts or law coming to notice of AO after he had passed assessment orders in regular assessment proceedings under section 143(3). Therefore, reasons in support of notice, prima facie indicated a change of opinion.

Followed:CIT, Delhi v. M/s. Kelvinator of India Limited (2010) 320 ITR 561 (SC) : 2010 TaxPub(DT) 1335 (SC) M/s. Kostub Investment Ltd. v. CIT (2014) 365 ITR 436 (Del) : 2014 TaxPub(DT) 1600 (Del-HC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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