Balajee Infratech & Constructions Pvt. Ltd Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that reopening of assessment under section 147 of the Income Tax Act impermissible since based solely on change of opinion without any new tangible material. Further, even on merits royalty payment represents a legitimate business expenditure allowable u/s. 37(1).
Facts- The present appeal has been preferred by the assessee against the order dated 24th January 2025 passed by Addl./Joint Commissioner of Income Tax (Appeals) pertaining to the assessment year 2012–13, arising out of the assessment framed u/s. 143(3) read with section 147 of the Income Tax Act, 1961. In this appeal, the assessee has assailed the disallowance of royalty payment amounting to ₹31,96,000 made u/s. 37(1) of the Act. Further, the assessee has also impugned the reopening of the assessment u/s. 147, contending that the reassessment was founded merely on a change of opinion, the original assessment having already been completed under section 143(3).
Conclusion- The premise of the reopening, therefore, rests merely on a legal inference drawn from identical facts that were already examined during the original assessment. There is neither any tangible material brought on record to indicate that the expenditure was bogus nor any new information to justify the reopening. The Assessing Officer has simply re-evaluated the same set of documents, which constitutes nothing but a change of opinion. It is well settled that a change of opinion, howsoever reasoned, does not confer jurisdiction under section 147 once an assessment under section 143(3) has attained finality. Therefore, even at the threshold, the assumption of jurisdiction for reopening the assessment is unsustainable in law.
