The Bombay High Court recently reiterated that a mere change of opinion expressed by the revenue cannot be grounds to effectuate reopening of original income tax assessment passed under section 143(3) of the Income Tax Act, 1961.
The decision was rendered while adjudicating a writ petition filed by Prithvi Apartments Co-operative Housing Society Limited (Prithvi Apartments) against the Income Tax Department, challenging the reopening of its concluded assessment of assessment year 2014 – 15 which had originally been completed under Section 143(3) of the Income Tax Act, 1961 on 07.12.2016.
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The petitioner, represented Rohan Deshpande, instructed by Alisha Pinto assailed the reassessment notice dated 31.03.2021 on the grounds that both issues relied upon by the Revenue,i.e., the eligibility of interest deduction under Section 80P and the disallowance under Section 40(a)(ia) had already been examined in the original assessment concluded on 07.12.2016.
Meanwhile, Akhileshwar Sharma along with Shraddha Worlikar represented the respondents.
The reasons recorded for reopening the concluded assessment were submitted in a letter addressed to Prithvi apartments where it was contended that the reassessment was initiated on grounds of new material unearthed during the verification of the profit and loss account and related records.
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The Division Bench of Justice M. S. Sonak and Justice Jitendra Jain noted that the issue regarding eligibility of interest under section 80P was already the subject matter of the original assessment order, and the issue regarding disallowance under section 40(a)(ia) was clarified during the assessment proceedings, along with details of the Tax Deducted at Source (TDS).
Noting that all the relevant concerns raised by the Revenue in their bid to reopen the assessment had already been discussed in prior, the Bombay High Court held that any attempt to reopen the case on the basis of the same two issues would amount to reopening on the basis of a change of opinion and review of earlier order which is barred by the Income Tax Act, 1961.
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Matters being so, the Bombay High Court proceeded to quash and set aside the impugned notice under Section 148 which attempted to reopen the concluded assessment.
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