Reopening of assessment merely based on change of opinion of AO not sustainable

Rich Feel Health and Beauty Private Limited Vs ITO (Bombay High Court)

Facts- Reopening of the assessment was questioned by the petitioner. The principal reason for reopening was advertisement and marketing expenditure incurred by the petitioner was not deductible in view of section 37, as petitioner was prohibited from advertising under the provisions of Indian Medical Council Act, 1956

Conclusion- It is clear that the AO in the original assessment was aware of the issue of expenses incurred on advertisement and marketing by the Petitioner. Once the AO had applied his mind in the regular assessment proceedings of Petitioner having incurred advertisement and marketing expenditure, it is not open for the AO to reopen the assessment.

We are therefore satisfied that the Assessing Officer could not have reopened the assessment merely on the basis of change of opinion and could not have issued a notice of reopening of assessment to Petitioner.

FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT

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