Case Law Details
PCIT Vs Safe Corrugated Containers Pvt. Ltd. (Madras High Court)
The issue under consideration is whether the reassessment proceeding u/s 147 initiated to form change of opinion which clearly amount to reviewing the original order of assessment is justified in law?
High Court states that, on perusal of Section 147, it is clear that if the Assessing Officer has reason to believe that any income chargeable has escaped assessment for any assessment year, the reassessment can be made. But, in the present case, no income was escaped from the assessment. The loss on sale of shares was disclosed by the assessee in the original return of income. Thereafter, scrutiny was conducted and after such thorough scrutiny, the assessment order was passed. Therefore, the Assessing Officer formed a clear cut opinion after a thorough scrutiny of all the documents and passed the original assessment order. A perusal of the order of the Commissioner of Income Tax (Appeals)-15 would make it clear that he has been persuaded to pass the orders as if there was no change of opinion, as, according to him, no opinion was formed by the Assessing Officer. However, the fact remains that the original assessment order was passed by the Assessing Officer after forming the opinion. It appears that the reassessment proceeding under Section 147 was made to form change of opinion and therefore, it would clearly amount to reviewing the original order of assessment under Section 147 under the pretext of reassessment. We make it clear that in the reassessment proceedings under Section 147, the original assessment order cannot be reviewed. Further, the proceedings also cannot be initiated merely because there is a possibility of change of opinion. Accordingly, we hold that no review on the original assessment order is permissible in the reassessment proceedings initiated under Section 147. Therefore, we are of the view that the Tribunal had rightly set aside the impugned reassessment made under Section 147 of the Act.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
The Court was held by Video Conference, as per the Resolution of the Full Court dated 3 July 2020, by Judges at their respective residences and the counsel, staff of the Court appearing from their respective residences.
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