Case Law Details
Telecon Consultancy Services LLP Vs ACIT (ITAT Ahmedabad)
Introduction: In a recent decision by ITAT Ahmedabad, the guidelines surrounding the initiation of re-assessment proceedings under section 147 of the Income Tax Act came to light. The case in point was “Telecon Consultancy Services LLP Vs ACIT”, where the crux of the matter was whether the Assessing Officer (AO) could initiate proceedings without any tangible evidence indicating the escape of income.
Analysis: The dispute initiated when the AO, based on previous records, believed there was an evasion of tax and initiated the re-assessment process. The AO’s stance was primarily based on the misclassification of interest income and business losses. However, the Assessee challenged the AO’s action, arguing that there were no new tangible materials or evidence to support the re-assessment, calling it merely a “change of opinion”.
Further, the Assessee stressed that the original assessment was done for specific scrutiny items, and there was no discussion regarding the items that the AO raised during the re-assessment.
The primary argument of the Assessee was that the AO had taken action based solely on documents already available during the original assessment without any fresh evidence. As per jurisprudence, if no new tangible material is presented, then re-assessment becomes a mere change of opinion, which is not acceptable under section 147 of the Act.
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