The Income Tax Appellate Tribunal, Delhi Bench reiterated that reopening of assessment by AO invalid if based on “change of opinion”.
The assessee, Paveljeet Singh Ruppal had filed his return of income on 30.09.2008 on a total income of Rs.1,71,40,407/-. Thereafter, the assessee’s case was selected for scrutiny and assessment order was passed under section 143(3) vide order, after making additions on account of ad hoc disallowance of expenses and additional demand of income claimed by the appellant in the Profit and Loss Account. Income was finally assessed. After completion of the assessment in the aforesaid manner and after expiry of four years from the relevant assessment year, the assessee’s case was reopened u/s 147 by the issuance of notice u/s 148.
The Delhi High Court in the case of Oracle India Pvt. Ltd. vs. ACIT held that where audited accounts were already available with the Assessing Officer and form part of the assessment record, then merely suggesting that there was failure on the part of the assessee to compute and declare the true taxable income without further clarification would not justify reopening of the assessment after the limitation period of four years.
The two member bench of Accountant Member Anil Chaturvedi and Judicial Member Amit Shukla held that there is no element of lack of true and full disclosure on the part of the assessee and the reasons are based on the material which was already on record. Thus, such a reason cannot clothe the Assessing Officer with the jurisdiction to reopen the assessment after the expiry of four years from the end of the relevant assessment year, merely on bald observation that there was failure on the part of the assessee to compute and declare the true taxable income.
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