Ceat Limited Vs ACIT (Bombay High Court)
The Bombay High Court examined the validity of a notice issued under Section 148 of the Income Tax Act, 1961, for Assessment Year 2012–13, along with the order rejecting the assessee’s objections. Since the reassessment notice was issued after the expiry of four years from the end of the relevant assessment year and the original assessment had been completed under Section 143(3), the proviso to Section 147 applied. Accordingly, the Revenue was required to establish a failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment.
Read SC Judgment: SC Dismisses Reopening Beyond Four Years Due to Change of Opinion
Upon reviewing the recorded reasons for reopening, the Court found that the Revenue failed to point out any material fact that had not been disclosed during the original assessment proceedings. The Court observed that the reasons merely reflected a change of opinion, which is impermissible in law. It further held that the reopening was based entirely on a mistake or error committed by the Assessing Officer during the original assessment, leading to an alleged underassessment.
Relying on the principle laid down by the Supreme Court in Indian & Eastern Newspaper Society v. Commissioner of Income-tax, the Court reiterated that an error discovered upon reconsideration of the same material already on record does not confer jurisdiction on the Assessing Officer to reopen a completed assessment. Reappraisal of existing material, without any new tangible information, amounts to a mere change of opinion and cannot justify reassessment proceedings. This legal position was also noted to have been followed by a Full Bench of the Karnataka High Court.
