INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - Change of opinion by AO -

AO reopened assessment on the reasoning that section 36(1)(viii) very clearly stated that deduction would be allowed for an amount (not exceeding forty percent of the profits-from such business of long term finance) as carried to such reserve. However, in case of assessee for the year under consideration, amount carried to reserved was only Rs. 410 crore, while deduction claimed was Rs. 456 crore. Thus, assessee had claimed excess deduction of Rs. 46 crore for the year under consideration and income amounting to Rs. 46 crore had escaped assessment. Assessee challenged this on the ground of change of opinion by AO. Held: Entire exercise for reopening the concluded assessment of the assessee was embarked upon by AO not on the basis of any fresh tangible material or any new information which had come to his notice subsequent to the culmination of the original assessment proceedings, but on the basis of the same set of facts as were there before his predecessor while framing of the original assessment under section 143(3). AO with the sole objective of substituting his view as against that of his predecessor had sought to reopen the case of assessee bank. Therefore, concluded assessment although reopened by AO within a period of 4 years from the end of the relevant assessment year, however, merely on the basis of a 'change of opinion' was set aside as invalid.

Relied:CIT v. Kelvinator of India (2010) 320 ITR 561 (SC) : 2010 TaxPub(DT) 1335 (SC) and NYK Lime (India) Ltd. v. DCIT (No.2) (2012) 346 ITR 361 (Bom) : 2012 TaxPub(DT) 2561 (Bom-HC) and Purity Tech Textile Pvt. Ltd. v. Asstt. CIT & Anr. (2010) 325 ITR 459 (Bom-HC) : (2010) 189 Taxman 21 (Bom) : 2010 TaxPub(DT) 1463 (Bom-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2007-08

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