Reopening of assessment on the basis of change of opinion is untenable

Bharat Amratlal Shah Vs ITO (Bombay High Court)

Bombay High Court held that reopening of assessment on the basis of change of opinion without reasons to indicate failure on the part of the petitioner to disclose truly and fully all the material facts is untenable in law.

Facts- The Petitioner filed return of income and computation of income of the for A.Y. 2015-16 on 4th January 2016. The Petitioner computed Rs.6.82 crores as long-term capital gain (LTCG) after deducting the indexed cost of acquisition, payments made to their sisters, expenses including the cost of furniture left and as per exemptions available under Section 54(2) by depositing the balance amount in the Capital Gains Accounts Scheme and under Section 54EC under by investing in Bonds.

A notice u/s 143(2) was given on 20th September 2016 and notice u/s 142(1) was given on 11th July 2017. The Petitioner submitted responses thereto dated 18th September 2017 and 22nd September 2017 with all relevant details and documents. The Assessment u/s 143(3) was completed on 25th September 2017. The notice to reopen the assessment has been issued on 31st March 2021 i.e. more than four years after the end of the relevant assessment year viz. A.Y. 2015-16.

The Petitioner’s case had been selected for scrutiny under CASS, on the issue of (i) Sale of Property mismatch, mismatch Income/Capital Gain on sale of land and building, (ii) Deduction claimed under head of Capital Gain. The Petitioner reconciled the differences with the AIR provided to him by the Respondent and after due examination the assessment was completed u/s 143 (3) of the IT Act on 25th September 2017 accepting the returned income of ₹ 1,22,980/-.

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