Case Law Details
DCIT Vs K.V. Mohana Rao and Co. Pvt. Ltd. (ITAT Visakhapatnam)
The issue under consideration is whether the re-opening of assessment u/s 147 is justified if the details on the basis of which case is re-opened was already available at the time of original assessment?
ITAT states that the concept of “change of opinion” on the part of the Assessing Officer to reopen the assessment does not stand obliterated by substitution of Section 147 of the Income Tax Act, 1961 by Direct Tax Laws (Amendment) Act, 1987 & 1989 after the amendment the Assessing Officer has a reason to believe that income has escaped assessment but it does not mean that simply the Assessing Officer can reopen the case, one must treat the concept of “change of opinion” as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April, 1989, the Assessing Officer has power to re-open, provided there is “tangible material” to come to the conclusion that there is an escapement of income from assessment. Reasons must have a live link with the formation of the belief. In the present case, the assessee has claimed interest on service tax paid as allowable deduction relates to the present A.Y. 2011-13, for that purpose he filed revised return, the same is examined by the Assessing Officer and completed the assessment u/sec. 143(3), therefore the Assessing Officer has already firmed opinion that the deduction claimed by the assessee is allowable deduction and accordingly allowed. Subsequently, on the basis of very same revised return and on the very same claim the Assessing Officer came to a conclusion that the expenses claimed by the assessee relates to the earlier year i.e. A.Y. 2011-12 and not relating to the assessment year under consideration, in our opinion is merely a change of opinion and is not permissible as per the decision of the Hon’ble Supreme Court in the case of M/s.Kelvinator of India Ltd. (supra).
Therefore, notice issued by the Assessing Officer has to be quashed.
FULL TEXT OF THE ITAT JUDGEMENT
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