JCIT Vs Jindal Power Limited (Chhattisgarh High Court)
Summary: Chhattisgarh High Court dismissed the Revenue’s appeal and upheld the ITAT Raipur order quashing reassessment for AY 2009-10. The assessee’s original scrutiny assessment had examined the same matters later used for reopening, including 100% depreciation on the dam, additional depreciation, Section 14A disallowance and interest/other income during the pre-production period.
The Court found that specific queries had been raised in the original proceedings, replies and supporting material were furnished, and the Assessing Officer had consciously completed the scrutiny assessment. The subsequent reasons under Sections 147/148 were therefore drawn from the existing assessment record rather than any fresh tangible material. The Court further noted that the recorded reasons did not state that income had escaped assessment because of any omission or failure by the assessee to disclose fully and truly all material facts, nor did they identify any fresh facts or false statement.
Applying Supreme Court principles on “reason to believe”, tangible material and change of opinion, the High Court held that a successor Assessing Officer cannot reopen a concluded assessment merely because, on re-examining the same disclosed material, he considers that the original officer committed an error in allowing deductions or depreciation. Such an exercise amounts to review through reassessment, which Section 147 does not permit. The reassessment initiated under Section 147 was consequently held invalid and without jurisdiction, and the Revenue’s appeal was dismissed with no order as to costs.
