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V.K. Sasikala Vs. DCIT - (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


Direct Taxation

The original return of income filed by the assessee was scrutinized under Section 143(3) of Income Tax Act, 1961 (IT Act) determining the income at Rs.529.40 Lacs. Subsequently, it was noted by Assessing Officer(AO) that the assessee had furnished the statement of accounts without incorporating the opening balances. On the liability side of Balance Sheet, the details of Sundry Creditors for Rs.94.12 Lacs were not furnished. Besides, the assessee was found to have made investments during the year in various firms for which the sources were not furnished. Accordingly, the case was reopened and notice was issued within 4 years from the end of relevant assessment year.

The assessee objected to proceedings on the ground that present proceeding tantamount to review of the concluded proceedings. However, AO referred to Explanation-1 to Sec.147 which specifically provides that, production of accounts books or material evidences will not necessarily amount to disclosure within the meaning of Section 147 of IT Act. Finally, the assessment proceedings were completed after making impugned additions. The Learned CIT(A) upheld the action of AO against which the assessee is in further appeal.

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 Learned AO during the course of original assessment proceedings.

The case law of Hon'ble 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. Since the assessment order is held to be invalid, delving into the merits of the case has been rendered infructuous. Appeal allowed.


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