Samtel India Limited Vs ACIT (ITAT Delhi)
Conclusion: Since no new material or facts had come to light and the AO had already applied his mind during the original assessment, the reassessment proceedings were invalid in law accordingly, Section 148 notice was quashed.
Held: In the instant case, during the course of assessment proceedings, assessee had objected the reopening and filed a details objection of the assessment order. Such objections were disposed off by AO in the assessment order itself wherein AO observed that certain factual errors were brought to the notice by the audit party and such objection of the audit party constituted the character of fresh information. From the perusal of the reasons recorded as well as perusal of the observation of the AO in disposing the objections raised by assessee, there was no quarrel that assessee had not truly and fully disclosed all the material facts necessary for the purpose of assessment. In the original assessment proceedings, AO after considering all the material had framed an opinion that the income declared by the assessee was true and correct. There was nothing more to disclose and a person could not be said to have omitted or failed to disclose something when, of such thing, he had no knowledge. Not only material facts were disclosed by assessee but also they were fully scrutinized by AO in the original assessment proceedings and figure of income as well as the deductions were worked out by AO. The claim of bad debts was duly disclosed in the Profit & Loss account which were available with AO while framing the assessment. Now on the same material AO had tried to cover up the error and omission by way of reopening the assessment without any fresh material which was nothing but mere change of opinion. No new information and/ or tangible material was found and the formation of any opinion based on same facts which were then available with AO at the time of original assessment was not permissible. The Hon’ble Apex court in the case of CIT Vs. Kelvinator of India Ltd (supra) had laid down that “ AO has no power to review; he has the power to re-assess, but re-assessment has to be based on fulfilment of certain pre – condition and if the concept of ‘change of opinion’ is removed, then, in the garb of re-opening the assessment, the review would take place. One must treat the concept of ‘Change of opinion’ as an in-built test to check abuse of power by AO.” It was not a case where some new material or information was brought on record. By respectfully following the judgement of Hon’ble apex court in the case of Kelvinator of India Ltd., reopening was not based on fresh material and was in the nature of mere change of opinion.
