INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - Change of opinion by AO on the same set of facts -

AO reopened assessment on the ground that interest on income-tax refund, which was credited to profit and loss account, was not offered to tax and thus income to that extent had escaped assessment. Held: Original assessment was completed under section 143(3) and issue regarding interest on income-tax refund was very much considered by AO at the time of original assessment proceedings. It was not the case where issue was not at all raised by AO. Nothing new had happened between the date of passing of original assessment order and the date of issuing notice under section 148. On a perusal of the reasons for reopening of assessment, it emerged that AO had gathered information from financial statement of assessee and undisputedly financial statement of assessee was very much before AO at the time of original assessment and more so, he had also inquired on this issue and assessee had replied to the same. Thus, no tangible material came into possession of AO which could lead to the inference that there was escapement of income due to the fault of assessee. Reopening thus, clearly amounted to forming of new opinion on the very same set of facts which was already available on record, which is not permissible in law. Therefore, reassessment was set aside.

Relied:Asian Paints v. Dy. CIT (2009) 308 ITR 195, 198 (Bom.) : 2009 TaxPub(DT) 0640 (Bom-HC)

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2008-09

INCOME TAX ACT, 1961

Section 147

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