Bombay High Court (HC) presided by Justices Dhiraj Singh Thakur and Kamal Khatia ruled that the Income Tax Officer has to infer the conclusions from the primary facts stated by the assessee.
The bench quashed the impugned notice under section 148 of the Income Tax Act, 1961 and assessment order passed under section 143 (3) read with section 147 of the Income Tax Act Also, set aside and all consequent actions in furtherance thereto are stayed.
The original return of income was filed on 31-03-2016 declaring total income at Rs. 5,55,93,680 for A.Y. 2015-116. Subsequently, the revised return was filed by the assessee on 14.02.2017 declaring total income of Rs. 5,56,63,130.
In this case assessment proceedings u/s.143(3) of the Income Tax Act, 1961 completed assessing total income at Rs. 6,13,89,818.
Mistri, Senior counsel for the petitioner submitted that the reopening of the assessment is based purely on change of opinion regarding set off of the long term capital loss against the long term capital gain of the current year which was considered and deliberated in the course of the original assessment proceedings by the respondent No.1 who passed an order under Section 143(3).
Conversely, the respondent asserted that he submitted that in view of the Assessment Order, the AO had rightly come to the conclusion that the assessee had failed to disclose the fully and truly all material facts and consequently the reopening of the assessment was justified.
The bench made the observation that it is important to carefully consider whether the Assessing Officer had any actual evidence to support reopening the assessment or whether it was simply a case of “review” and “change of opinion” on their part.
Additionally, after perusing the documents and the justifications listed in the notice for the reopening, we see that AO did not specify what new tangible evidence was used to support the reopening or what crucial information was not accurately and completely revealed. After considering the both sides, the bench stated the petitioner has disclosed all the primary facts to the respondent as can be evidenced from the responses to the original proceedings. Moreover, the duty of the assessee does not extend beyond making a true and full disclosure of the primary facts.
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