The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has recently held that the re-assessment order passed under Section 147 of the Income Tax Act, 1961 on account of mere change of opinion is not valid.
Section147 of the Income Tax Act deals with reopening of assessment proceedings.
The appeal was filed by the assessee, Glen Propbuild Private against the order of Commissioner of Income Tax (Appeals) who failed to appreciate that the reason recorded for reopening the case under Section 147/148 of the Income Tax Act was mere change of opinion.
Assessee’s case was earlier assessed under Section 143(3) Income Tax Act. Thereafter, the reopening has been conducted after four years of passing the original assessment order.
The assessee filed an appeal before the CIT(A). The CIT(A) confirmed the reopening of proceedings conducted by the AO. Aggrieved assessee filed a second appeal before the tribunal.
Salil Kapoor, counsel for the assessee submitted that Assessing Officer has not come into any possession of any fresh material warranting reopening. Hence, the proceedings carried out by AO on account of mere change of opinion there has no fresh material coming to the possession of Assessing Officer.
Ananya Kapoor, counsel for the revenue, relied upon the decision of the CIT(A) confirming the decision of AO.
The tribunal observed that the Assessing Officer has doubted the assessment only on the basis of observation that from the perusal of case records itself he has observed certain aspects which lead to the reopening. Hence, this was observed to be a clear case of change of opinion and the reassessment was held to be not valid.
Therefore, the two-member bench of tribunal comprising Shamim Yahya, (Accountant Member) and Anubhav Sharma, (Judicial Member) allowed the appeal filed by the assessee and quashed the reassessment order.
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