Reopening could not have been done in absence of new facts coming to knowledge subsequent to original assessment proceedings

Cognizant Technology Solutions India Private Limited Vs ACIT (Madras High Court)

Conclusion: In present case, the Division Bench of the Hon’ble Madras High Court provided relief to the Petitioner observing that in the absence of new facts coming to the knowledge of the Assessing Officer subsequent to the original assessment proceedings, the reopening could not have been done on the same materials. The impugned reassessment proceedings, having been done with the same set of facts which were available during the regular assessment, is to be held to be a clear case of change of opinion.

Facts: The assessment for the year 2013-14 was completed by order, dated 31.12.2016, under Section 143(3) read with Section 92CA of the Act. Notice under Section 148 was issued on 29.03.2018, proposing to reopen the assessment. The assessee sought for the reasons for reopening, but the reasons were not satisfactory for the assesse, therefore he filed a writ petition.

The learned Single Bench had dismissed the writ petition on the ground that the Assessing Officer, if he is able to trace out a new information, material or dimension in consonance with the provisions of the Act, which was omitted by the Original Assessing Authority, it is a good ground for reopening the assessment.

Due to this Order, the assesse preferred appeal before the Division Bench of the Hon’ble High Court, wherein it was observed that the conceptual difference between the power to review and power to re-assess has to be kept in mind; the Assessing Officer has no power to review, he has power to re-assess, but reassessment is to be based on fulfillment of certain pre-conditions and if the concept of “change of opinion” is removed, then, in the garb of reopening the assessment, review would take place and one must treat the concept of “change of opinion” as an in-built test to check abuse of power by the Assessing Officer. In Commissioner of Income Tax v. Techspan India Pvt. Ltd. reported in ITO (2018) (302 CTR 74), it was held that the reassessment proceedings cannot be initiated on the basis of same facts as was available during the regular assessment and in the absence of any new material coming to the light of the Assessing Authority.

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