Case Law Details
Macrotech Developers Limited Vs ACIT (Bombay High Court)
The question is whether there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of Assessment Year 2012-13. It is not the case that there is failure on the part of the assessee to make a return under Section 139 of the Act. The case of the assessee was selected for scrutiny for Assessment Year 2012-13 and it is after complete examination of the original computation of income, revised computation of income and audit, the Assessing Officer has allowed the claim of the assessee towards deductibility of interest expense of Rs.74,30,91,206/-.
Thus, it is clear that the complete details were made available by the petitioner company in the course of assessment proceedings under Section 143(3) of the Act for Assessment Year 2012-13. In this backdrop, it can safely be concluded that the re-assessment proceedings for this year have been initiated despite the fact that the details in connection with the reasons for re-opening were already furnished for Assessment Year 2012-13. It is also stated that no disallowance were made in the assessment order regarding interest inventorization and the same was accepted by the Assessing Officer towards deductibility of interest expense of Rs.74,30,91,206/-.
Thus, the reasons for re-opening the assessment of the relevant year were based on the details furnished in the assessment proceedings of Assessment Year 2012-13. Merely, if some other decision has been taken by the Department for other years i.e., Assessment Year 2013-14 and Assessment Year 2014-15, the respondent authorities do not retain the power to review the order of Assessment Year 2012-13 in the garb of re-opening under Section 147 of the Act. Thus, on change of opinion and reviewing its own order is bad in law and without jurisdiction. In our view, re-opening of the assessment without any basis and merely change of opinion is not permissible while exercising powers under Section 147 r/w Section 148 of the Act.
In the present case, the reasons which have been recorded by the assessing officer for reopening of the assessment do not disclose that the assessee had failed to disclose fully and truly all material facts necessary for the purpose of assessment. The duty is cast upon the assessee to make true and full disclosure of the facts at the time of original assessment. The duty of the assessee in any case does not extend beyond making a true and full disclosure of primary facts. It is for the Assessing officer to draw the correct inference from the primary facts. If the assessing officer draws an inference which appears subsequently to be erroneous, mere change of opinion with regard to that inference would not justify initiation of action for reopening assessment.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
