Reassessment based on Mere Change of Opinion is Invalid: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Pune Bench held that reassessment on mere change of opinion is invalid. The appeal has been preferred by the Revenue against the order passed by the Commissioner of Income Tax (Appeals).

The grievance of the revenue in this appeal is that the CIT(A) has allowed the relief to the assessee, Dinesh M. Raste by holding that the reopening of the assessment u/s 147 or 148 of the Income-tax Act, 1961 was bad in law and invalid.

Therefore, the issue for adjudication before the Tribunal is with regard to the validity of the re-assessment proceedings initiated by the A.O which has been held to be invalid by the first appellate authority. Admittedly, the reopening has been done beyond the period of four years and as per the proviso to section 147 of the Act, such reopening beyond four years is permitted only if the A.O proves that the assessee during the original assessment proceedings has failed to disclose fully and truly all the material relevant facts.

The CIT(A) observed that “The A.O in the reopening order has not brought out any fact on record which was not disclosed by the assessee during the original proceedings. That, as per the proviso to sec. 147 of the Act, when there is no failure on the part of the assessee either to file return of income or to disclose fully and truly all material facts necessary for assessment in such scenario reopening of assessment done beyond four years is invalid and bad in law.”

The Bench consisting of Inturi Rama Rao, Accountant Member and Partha Sarathi Chaudhury, Judicial Member observed that “All the material facts were already disclosed by the assessee before the A.O at the time of original assessment and even we have observed that the CIT(A) in his order has verified that the A.O has acknowledged all these information which were before him during the original assessment proceedings while resorting to the re-assessment proceedings. Therefore, in the instant case also the reassessment is not a case where the assessee has not disclosed fully and truly all material facts but it is a case where the re-assessment proceedings were initiated only on a mere change of opinion by the A.O which is not permissible in law.”

To Read the full text of the Order CLICK HERE

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