Imperial Consultants and Securities Ltd Vs DCIT (Bombay High Court)
Bombay High Court held that reopening under section 147 of the Income Tax Act based on the very material on which the assessment order was passed is impermissible in law since it merely depicts change of opinion.
Facts- This petition under Article 226 of the Constitution of India challenges the legality and validity of the notice dated 31 March 2021 issued to the petitioner u/s. 148 of the Income Tax Act, 1961 and an order dated 24 February 2022 disposing of the objections filed for reopening of the assessment and the consequential notice dated 14 November 2021 issued under Section 143(2) of the IT Act. It also assails the notice dated 24 February 2022 issued under Section 142(1) of the IT Act. There is a further prayer that the respondents be directed by a writ of this Court, not to act upon the impugned orders and the impugned notices. The petitioner has also raised an issue in regard to the approval granted under Section 151 of the IT Act for reopening of the assessment.
Conclusion- Held that the entire basis for such reopening is on the materials which was already available with the Assessing Officer, in finalizing the petitioner’s assessment under Section 143(3) of the IT Act. If this be so, the Assessing Officer was acting on a complete change of opinion on the same material and / or intending to have a review of the assessment order passed by him. This was certainly not permissible applying the settled principles of law as discussed by us hereinabove. Thus, on both the counts namely on failure of the Assessing Officer in adhering to the mandate as contained in the first proviso to Section 147, and on exceeding his jurisdiction as conferred by the said provision by forming an opinion on the same material, which was available with him in the course of assessment proceedings, was wholly an impermissible exercise of jurisdiction, to issue the impugned notice.
