INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - Assessment reopened after expiry of four years - Assessment based on materials already available on record---Change of opinion

Assessment was reopened in case of assessee after a period of four years on the ground that income chargeable to tax had escaped assessment by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of the assessment for the concerned year. The assessment was sought to be reopened on the ground that the deduction claimed by the assessee under section 10(B) was not sustainable and also with regard to difference in valuation of closing stock. It was contended on behalf of the assessee that the scrutiny assessment was already completed after hearing the assessee, after perusing the return, statements of account furnished by it and after examining the books of account, the reopening of the assessment after the expiry of four years was bad in law and invalid. Held: AO, while reopening the assessment and passing the consequent reassessment order, did not point out details or material facts necessary for completion of the assessment, which was not disclosed by the assessee in original assessment proceedings under section 143(3). Thus, it would be said that the AO reopened the assessment based on materials, which were already available on record and therefore, the reopening of the assessment was a mere change of opinion and accordingly, was not valid in law. Hence, such reopening would not be sustainable.

REFERRED : CIT v. Kelvinator of India Ltd. (2010) 320 ITR 561(SC) : 2010 TaxPub(DT) 1335 (SC) CIT v. Dinesh Chandra H. Shah & Ors. (1971) 82 ITR 367 (SC) : 1971 TaxPub(DT) 0379 (SC) DCIT v. Indira Industries [ITA No.1833/Mds/2012, dt. 7-5-2013]

FAVOUR : In assessee's favour

A.Y. : 2004-05

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