The Kolkata bench of the Income Tax Appellate Tribunal, recently in ACIT v. BNK E Solutions Pvt Ltd, ruled that re-assessment solely based on the original assessment records and without any fresh tangible materials in the possession of the AO is bad in law under the provisions of Sections 147/148 of the Income Tax Act.
Re-assessment proceedings under section 147 were initiated against the assessee on ground that the AO while completing the original assessment and formed a particular opinion on the assessee’s claim of deduction under section 10A of the Income Tax Act. The assessee challenged the proceedings by contending that it was merely on the basis of change of opinion, without any new material coming to the notice of the AO.
The first appellate authority accepted the arguments of the assessee and concluded the matter in favour of it. aggrieved by the order, the department approached the ITAT for relief.
Dismissing the appeal, the bench observed that there was no fresh tangible material in the possession of AO at the time of recording of reasons for initiating proceedings u/s.147 of the Act. “A perusal of the ‘Reasons’ recorded by the AO in this case reveals that at the time of recording of these ‘Reasons’ the AO had examined original assessment records only and no fresh material had come in the possession of the AO. In response to our specific query also, Ld DR could not point out any fresh material available with the AO at the time of reopening of the case of the assessee. Thus, assertion of the assessee that there was no fresh material with AO for reopening of this case, remained uncontroverted.”
Read the full text of the Order below.
