Reopening of assessment u/s 148 for mere change of opinion is unsustainable

By POONAM GANDHI Income Tax Judiciary July 21, 2023

TaxGuru Citation: 2023 taxguru.in 4511
Case Name: Mukand Limited Vs Union of India (Bombay High Court)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: All High Courts, Bombay High Court

Already Upgraded? Log in.

Mukand Limited Vs Union of India (Bombay High Court)

Bombay High Court held re-opening of assessment under section 148 of the Income Tax Act for mere change of opinion is without jurisdiction and unsustainable in law.

Facts- Petitioner has filed this petition challenging the legality and validity of notice dated 26th April 2011 issued by respondent no.2 under Section 148 of the Income Tax Act, 1961 (the Act).

Conclusion- In this case, petitioner had filed all details and the subject of brought forward unabsorbed depreciation was also considered while passing the assessment order u/s. 143(3) of the Act. Therefore, the Assessing Officer had in his possession all primary facts and it was for him to draw proper inference as to whether the brought forward unabsorbed depreciation should be adjusted against capital gains or profit and gains from business or profession. There was nothing more to disclose and a person cannot be said to have omitted or failed to disclose something when, of such thing, he had no knowledge.

Held that petitioner had truly and fully disclosed all material facts necessary for the purpose of assessment. Not only material facts were disclosed by petitioner truly and fully but they were carefully scrutinized and the figures of income as well as deductions were worked out carefully by the Assessing Officer.

Therefore, in our view, it is nothing but a clear case of change of opinion and the Assessing Officer has no jurisdiction to re-open the assessment.

FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT

1 Petitioner has filed this petition challenging the legality and validity of notice dated 26^th April 2011 issued by respondent no.2 under Section 148 of the Income Tax Act, 1961 (the Act).

2 In respect of Assessment Year 2006-2007, petitioner had filed return of income on 10^th November 2006 declaring total income at “Nil”. Petitioner also had filed, alongwith return, note to computation of income. In the original return of income, petitioner computed the total income at “Nil” after claiming set off of brought forward unabsorbed depreciation against the long term capital gains and business income. The total income of petitioner was computed as follows :