DCIT Vs Punjab National Bank (ITAT Delhi)
ITAT Delhi Upholds Quashing of Reassessment Against Punjab National Bank – Mere Change of Opinion Cannot Justify Reopening
The original scrutiny assessment u/s 143(3) was completed on 27.02.2014. Later, AO issued notice u/s 148 on 22.09.2017 alleging that Assessee had failed to add provision for standard assets in computation of book profit u/s 115JB, resulting in escapement of income of Rs.35 crore. NFAC quashed reopening, holding that since assessment was reopened beyond four years from end of AY 2011-12, the proviso to sec 147 applied, requiring AO to demonstrate failure by Assessee to disclose fully & truly all material facts. As all facts were already available in original proceedings, AO’s action was nothing but change of opinion.
Tribunal noted that reasons recorded by AO merely alleged intent to avoid tax without pointing to any fresh material. Provision for standard assets was already part of balance sheet during original assessment, yet no adjustment was made by AO at that stage. Reopening after four years without demonstrating failure of disclosure was barred by law. Tribunal referred to judgment in CIT Vs. Kelvinator of India Ltd. (2010) 320 ITR 561 (SC), which held that reassessment cannot be initiated on mere change of opinion. It also relied on Hindustan Lever Ltd. Vs. R.B. Wadekar (2004) 268 ITR 332 (Bom), emphasizing that reopening reasons must be read as they stand & cannot be improved later. Tribunal found that Revenue’s grounds did not rebut the NFAC’s findings & there was no tangible material justifying reopening. Accordingly, NFAC’s order quashing reassessment was upheld.
