Case Law Details
1. We find that the assessee filed the return on 30/10/2005 and the case was, subsequently, on scrutiny assessment, completed u/s 143(3) r.w.s 148 of the Act on 01/03/2013, thus, reopening is beyond a period of four years, more specifically when the material facts were fully and truly disclosed by the assessee. Before adverting further it is noted that the Assessing Officer while disposing off the application made u/s 154 of the Act, due to enhancement of disallowance u/s 40(a)(ia) of the Act, the matter travelled upto the Tribunal, wherein, it was held that while passing order u/s 154 of the Act, no enquiry can be made as no debatable issue dealt with and thus the Tribunal dismissed on same lines. Even otherwise, the assessee vide letter dated 09/11/2012 pointed out that 154 notice, issued earlier was still alive and proceedings initiated u/s 148 was bad in law. In the aforesaid order, we find that no disallowance was held to be justified u/s 40(a)(ia) of the Act as the assessee had already deposited the TDS before the due date of filing of return u/s 139(1) of the Act, therefore, we find no justification to reopen the assessment beyond four years.
2. However, in the present appeal undisputedly, the assessment was framed u/s 143(3) r.w.s. 148 of the Act, meaning thereby, a opinion was formed by the Assessing Officer. In such situation, we observe that there is change of opinion by the Assessing Officer. Reassessment proceedings will be invalid in a case where assessment order itself records that the issue was raised, facts were examined, necessary details were filed by the assessee and the Assessing Officer decides in favour of the assessee, thus, reassessment proceedings in such cases will be hit by the principle of “change of opinion” as in the assessment order an opinion was formed by the Assessing Officer. The expression “change of opinion” postulates formation of opinion and then a change thereof. In the context of assessment proceedings, it means formation of belief by an Assessing Officer resulting from what he thinks on a particular question. It is a result of understanding, experience and reflection. A distinction must be drawn between erroneous application/ interpretation/ understanding of law and cases where fresh or new factual information comes to the knowledge of the Assessing Officer subsequent to the passing of the assessment order. The reason is that “opinion” is formed on facts. “Opinion” formed or based on wrong and incorrect facts or which are belied and untrue do not get protection and cover under the principle of “change of opinion”. Factual information or material which was incorrect or was not available with the Assessing Officer at the time of original assessment would justify initiation of reassessment proceedings. The requirement in such cases is that the information or material available should relate to material facts. The expression “material facts” means those facts which if taken into account would have an adverse effect on the assessee by a higher assessment of income than the one actually made. They should be proximate and not have a remote bearing on the assessment. The omission to disclose may be deliberate or inadvertent. However, in such cases, the onus will be on the Revenue to show that the assessee had stated incorrect and wrong material facts resulting in the Assessing Officer proceeding on the basis of facts, which are incorrect and wrong. The reasons recorded and the documents on record are of paramount importance and will have to be examined to determine whether the stand of the Revenue is correct. There is a difference between “change of opinion” and “failure or omission” of the Assessing Officer to form an opinion on a subject-matter, entry, claim, deduction, etc. When the Assessing Officer fails to examine a subjectmatter, entry, claim or deduction, he forms no opinion. It is a case of no opinion. Whether or not the Assessing Officer had applied his mind and examined the subject-matter, claim, etc., depends upon factual matrix of each case. The Assessing Officer can examine a claim or subject-matter even without raising a written query. There can be cases where an aspect or question is too apparent or obvious to hold that the Assessing-Officer did not examine a particular subject-matter, claim, etc. The stand and stance of the assessee and the Assessing Officer in such cases are relevant.
3. Section 114 of the Evidence Act, 1872, is permissive and not a mandatory provision. Nine situations by way of illustrations are stated, which are by way of example or guidelines. As a permissive provision it enables to judge to support his judgment but there is no scope of presumption when facts are known. Presumption of facts under section 114 is rebuttable. The presumption raised under illustration (e) to section 114 of the Act means that when an official act is proved to have been done, it will be presumed to have been regularly done but it does not raise any presumption that an act was done for which there is no evidence or proof.
(i) Section 114(e) of the Act can be applied to an assessment order framed under section 143(3) of the Act, provided that there has been a full and true disclosure of all material and primary facts at the time of original assessment. In such a case if the assessment is reopened in respect of a matter covered by the disclosure, it would amount to change of opinion.
4. For reopening an assessment made under section 143(3) of the Act, the following conditions are required to be satisfied:
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