Change in Opinion Insufficient for Reassessment: ITAT highlights Validity of Notice u/s 148 in Vedanta Limited Case [Read Order]
The tribunal observes that a change in opinion is not sufficient reason, allowing appeal in favour of the assessee
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, observed the validity of a notice issued under Section 148 of the Income Tax Act, 1961 and held that a change in opinion was not sufficient enough for reassessment in an appeal filed by Vedanta Limited.
The facts of the case are that the assessee - Vedanta Limited (formerly known as the Madras Aluminium Company Ltd.), is a company that manufactures and sells aluminum, the company is also in the commercial power generation business. Their return of income was selected for scrutiny and the Assessing Officer (AO) framed the assessment order dated 28.01.2013 making an addition of INR 2,06,19,999 under Section 14A of the Income Tax Act, 1961.
The assessee also claimed certain deductions which were disallowed by the Commissioner of Income Tax (Appeals) [ CIT(A) ].
While the appeal was pending before CIT(A) against the original order, re-assessment proceedings were initiated by the AO under Section 148. The assessee sought reasons for reopening the assessment proceedings and objected to it being barred by limitation. The tribunal observed that the reasons given were not on the basis of any fresh material/information.
On the jurisdictional issue, the assessee submitted that the CIT(A) had erred in not considering the jurisdiction under Section 147 cannot be exercised by the AO on a mere change of opinion. Such premiums cannot be given to authorities exercising quasi-judicial function who can take benefit. Thus, the re-opening of assessment is without jurisdiction as per the decision in CIT v. Orient Craft Ltd.
The two member bench of Pawan Singh (Judicial Member) and Brajesh Kumar Singh (Accountant Member) relied on CIT v. Kelvinator of India Ltd which held that assessment cannot be reopened based on change of opinion. Since the reassessment was deemed improper, the rejection was also held to be improper. Accordingly, CESTAT ruled in favour of the assessee.
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