Assessment concluded by Predecessor can't be Reopened u/s 147 of Income Tax Act merely on ground of "Change of Opinion": ITAT [Read Order]

The Raipur bench of the Income Tax Appellate Tribunal (ITAT) held that the assessment concluded by the predecessor cannot be reopened under Section 147 of the Income Tax Act, 1961 merely on the ground of change of opinion.

The assessee had filed her return of income declaring an income of Rs.3,72,070/- [including Long-term capital gain (LTCG) of Rs.2,21,602/-]. The return of income filed by the assessee was processed as such under Section 143(1) of the Income Tax Act.

The original assessment was, thereafter, framed by the Assessing Officer vide his order passed under Section 143(3) of the Income Tax Act, wherein the income of the assessee was assessed at Rs.4,42,070/-. Thereafter, the Assessing Officer reopened the case of the assessee under Section 147 of the Income Tax Act. Notice under Section 148 of the Income Tax Act was issued to the assessee.

The Assessing Officer thereafter framed assessment vide his order passed under Section 143(3) read with Section 147 of the Income Tax Act, wherein the LTCG on sale of land at Dumar Talab was reworked out by him at Rs.8,45,505/- as against LTCG of Rs.2,21,602/- that was disclosed by the assessee in her original return of income and was earlier accepted by his predecessor vide assessment framed under Section 143(3) of the Income Tax Act.

The Authorized Representative for the assessee has assailed the validity of the jurisdiction assumed by the Assessing Officer for initiating proceedings under Section 147 of the Income Tax Act on two-fold grounds, viz. (i) the reopening of the concluded assessment based on a “mere change of opinion” was not sustainable in the eyes of the law; and (ii) that as per the mandate of “1st proviso” to Section 147 of the Income Tax Act, the concluded assessment of the assessee could not have been reopened in the absence of any failure of the assessee to disclose fully and truly all material facts necessary for her assessment; therefore, we shall first deal with the same.

The Single bench member comprising of Ravish Sood (Judicial member) held that the Assessing Officer had wrongly assumed jurisdiction and reopened the concluded assessment of the assessee, which was earlier framed by his predecessor vide order passed under Section 143(3) of the Income Tax Act, therefore, the consequential assessment order passed by him under Section 143(3) read with Section 147 of the Income Tax Act was quashed. Thus, the appeal of the assessee was allowed.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates