Sasi Enterprises, Chennai vs. Deputy Commissioner of Income Tax - (Income Tax Appellate Tribunal) (23 Jun 2023)

In the absence of any new tangible material, the case could not be reopened on mere change of opinion

MANU/IX/0253/2023

Direct Taxation

Appeals by assessee for Assessment Years (AY) 1997-98 and 2001-02 arises out of the separate orders of learned first appellate authority. The sole substantive ground that falls for consideration is addition of Rs.16.47 Lacs under Section 68 of the Income Tax Act, 1961 (IT Act). The assessee is stated to be a partnership firm.

The original return of income was scrutinized under Section 143(3) of IT Act. The case was reopened within 4 years. The perusal of assessment order would show that, AO has not referred to any tangible material coming into his possession which would lead to formation of a belief that certain income escaped assessment in the hands of the assessee. Apparently, reassessment has been initiated on the same set of material as available before AO during original assessment proceedings. This being so, the reassessment proceedings would be nothing would review of the order which is impermissible.

The case law of Supreme Court in the case of Kelvinator of India Ltd. support the case of the assessee wherein it was held that, in the absence of any new tangible material, the case could not be reopened on mere change of opinion. Respectfully following the same, present Tribunal would hold that the reassessment proceedings were nothing but the review exercise undertaken by AO. Therefore, the reassessment proceedings are bad in law and hence quashed. Appeal allowed.

Tags : ADDITION REASSESSMENT LEGALITY