AO cannot Change Opinion in Matters involving Similar Facts: Delhi HC upholds Principle of Consistency
The division bench of Delhi High Court has held that Assessing Officer cannot change opinion in matters involving similar facts and upholds Principle of Consistency. Appeal filed by revenue against the order of Income Tax Appellate Tribunal deleting the addition of Rs.5,64,73,054/- made by the Assessing Officer under Section 36(1)(iii) of the Income Tax Act, 1961 on account of disallowance...
The division bench of Delhi High Court has held that Assessing Officer cannot change opinion in matters involving similar facts and upholds Principle of Consistency.
Appeal filed by revenue against the order of Income Tax Appellate Tribunal deleting the addition of Rs.5,64,73,054/- made by the Assessing Officer under Section 36(1)(iii) of the Income Tax Act, 1961 on account of disallowance of interest expenditure.
The appellant revenue submitted that ITAT has failed to appreciate that the assessing company had used the borrowed funds for non-business purposes. Further submitted by the appellant that it is settled principle that in matters pertaining to tax there is no issue of res judicata because each year’s assessment is final only for that particular financial or assessment year and does not govern later years.
The Tribunal observed that the facts and circumstances in the present appeals similar to the facts and circumstances for the previous assessment years. The principles of res-judicata and estoppel are not applicable in taxation matters. The Tribunal further observed that a departure from a finding during the past years would result in a contradictory finding. It was not appropriate to allow reconsideration of an issue for a subsequent assessment year if the same “fundamental aspect” permeates in different assessment years.
The Coram of Mr. Justice Manmohan and Mr. Justice Dinesh Kumar Sharma by giving reliance to Supreme Court decision in Principal Commissioner of Income Tax, New Delhi vs. Maruti Suzuki India Ltd has held that “consequently, this Court is of the view that all similar matters should receive similar treatment except where factual differences require a different treatment so that there is assurance of consistency, uniformity, predictability and certainty of judicial approach. Applying the said principles, this Court is of the opinion that no question of law arises for consideration in the present appeals and the same are dismissed”.
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