The Tax PublishersITA No. 262/Mum/2016
2019 TaxPub(DT) 5975 (Mum-Trib)INCOME TAX ACT, 1961
Section 147
Where reopening of assessment was made on change of opinion without there being any tangible material in the position of the AO, which suggested escapement of income and also without making any allegation as to failure on the part of assessee to disclose fully and truly all the material facts necessary for assessment, the reassessment proceedings initiated under section 147 were liable to be quashed.
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Reassessment - Change of opinion - No fresh material in possession of AO -
Assessee-company filed its return of income and its assessment was completed under section 143(3). Subsequently, the assessment was reopened under section 147 on the ground that income chargeable to tax escaped assessment on account of allowance of ineligible expenditure of provision for product warranty. Assessee contended that assessment was completed under section 143(3), where it filed a detailed note on product warranty provision and the AO discussed the issue in the assessment and after being satisfied with the explanation filed by it, completed assessment. Therefore, it was a case of change of opinion, and hence, the reassessment proceedings were liable to be quashed. Held: It was found that the original assessment was completed under section 143(3) and such assessment was reopened after four years from the end of relevant assessment years without making any allegation as to failure on the part of assessee to disclose fully and truly all material facts necessary for assessment. Therefore, the reopening of assessment, in the instant case was made on change of opinion without there being any tangible material in the position of the AO, which suggested escapement of income and also without making any allegation as to failure on the part of assessee to disclose fully and truly all the material facts necessary for assessment. Therefore, the reassessment proceedings initiated under section 147 were quashed.
Followed:ITO, Ward No. 16 (2) v. M/s. TechSpan India (P) Ltd. & Anr. (2018) 404 ITR 10 (SC): 2018 TaxPub(DT) 1991 (SC) CIT, Calcutta v. Rai Bahadur Hardutroy Motilal Chamaria (1967) 66 ITR 443 (SC): 1967 TaxPub(DT) 347 (SC) Dolgobinda Paricha v. Nimai Charan Misra & Ors. in (Civil Appeal No. 206 of 1954, dt. 27-4-1959) State Bank of India, and Mumbai v. Asst. CIT, Circle 2 (2) (1), Mumbai & Ors. in (Writ Petition No. 3588 of 2018, dt. 17-1-2019) : 2019 TaxPub(DT) 1252 (Bom-HC)
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
IN THE ITAT, MUMBAI BENCH
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