Re-opening of Assessment cannot be done in a Mechanical Manner and on a Change of Opinion: ITAT [Read Order]

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that the re-opening of an assessment cannot be done in a mechanical manner and on the basis of change of opinion by the Assessing Officer under Section 148 of the Income Tax Act, 1961.

The assessee, M/s. Standard Builders, approached the Tribunal challenging the re-assessment order contending that the reopening was based on mere change of opinion since all the material was available before Ld. AO during the course of original assessment proceedings.

Earlier, the CIT(A) rejected the appeal observing that the notice u/s 148 was issued as per law and AO had followed the due procedure while completing the reassessment proceedings.

Allowing relief to the assessee, the Tribunal bench comprising ITAT Vice-President Mr. Mahavir Singh and Accountant Member Mr. Girish Agarwal held that reopening could not be done in a mechanical manner and on a mere change of opinion.

“Further, in case of reopening beyond 4 years, the revenue must allege that there was a failure on the part of the assessee to disclose material facts. We find that the impugned order is very cryptic on the issue of reopening and reassessment proceedings have been justified merely by observing that the notice u/s 148 was issued as per law and AO had followed the due procedure while completing the reassessment proceedings. The impugned order does not address the issues flagged by the assessee. Therefore, we deem it fit to restore the appeal back to the file of Ld. CIT(A) for fresh adjudication of legal grounds as well as fresh adjudication on merits considering the submissions of the Ld. AR. Needless to add that adequate opportunity of hearing shall be granted to the assessee,” the Tribunal said.

To Read the full text of the Order CLICK HERE

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