Reopening of assessment merely based on change of opinion is unsustainable

Gandhibag Sahakari Bank Limited Vs DCIT (Bombay High Court)

Bombay High Court held that re-opening of assessment under section 148 of the Income Tax Act, without indicating basis for having a reason to belief that income has escaped assessment, merely based on change of opinion is unsustainable in law and liable to be quashed.

Facts- The challenge raised in the present writ petition is to the notice dated 31.03.2021 issued by the Assistant Commissioner of Income Tax under Section 148 of the Income Tax Act, 1961. By the said notice it was proposed to re-assess the income/loss of the petitioner – a Co-operative Bank for the assessment year 2017-18.

Conclusion- Held that the Assessing Officer in absence of any independent verification of the information available on the Insight Portal has proceeded to re-open the completed assessment without indicating the basis for having a reason to believe that the information in the hands of the petitioner had escaped assessment. Further re-opening is on the basis of gross incorrect facts that the assessment had been completed under Section 143(1) of the Act of 1961 and was hence no assessment under Section 2(40) of the Act of 1961 when infact the assessment had been completed under Section 143(3) of the Act of 1961. The re-opening was thus merely an outcome of change of opinion of the Assessing Officer. The notice issued on 31.03.2021 under Section 148 of the Act of 1961 is thus liable to be quashed. It is accordingly quashed having been issued in absence of statutory jurisdiction in that regard. Consequentially, steps taken pursuant to the said notice issued under Section 148 of the Act of 1961 would not survive.

FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT

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