P.Sundararajan Vs DCIT (Madras High Court)
Madras High Court held that reopening of assessment u/s. 148 of the Income Tax Act merely on the basis of change of opinion does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment. Accordingly, appeal allowed and reassessment quashed.
Facts- Assessee is an individual, Director in a company by name S.P.Apparels Ltd. Post completion of scrutiny assessment, assessee received notice dated 25.03.2010 under Section 148 of the Act, to which reply dated 22.04.2010 was filed. Thereafter, assessment order dated 23.12.2010 under Section 143(3) read with Section 147 of the Act came to be passed, by which assessee was called upon to pay additional tax plus interest. CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed by the assessee.
Conclusion- Held that the fact that during the original assessment proceedings, assessee had addressed a communication dated 22.04.2008 on the same grounds, based on which this notice under Section 148 of the Act has been issued, itself confirms the fact that this issue was a subject of consideration of the Assessing Officer while completing the original assessment. Thus, we would opine that the reopening of the assessment was merely on the basis of change of opinion of the Assessing Officer from that, as held earlier during the course of assessment proceedings, leading to the assessment order dated 22.04.2008. This change of opinion does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment.
