Case Law Details
Sanjit Jitendranath Biswas Vs ITO (ITAT Surat)
Conclusion: AO had no power to review; he had the power to re-assess. Reassessment was not justified in case there was no “tangible material” found to come to the conclusion that there was escapement of income from assessment.
Held: AO had reopened the assessment of assessee. Assessee contended that the reopening of assessment was arbitrary and based on mere change of opinion as the issues of reopening were duly covered in the original assessment order u/s 143(3). From the original assessment order u/s 143(3), it was cleared that receipts of Rs.64,23,832/- and Rs.84,75,415/- were duly considered while calculating total turnover and estimating profit @ 8% for addition of suppressed income. Assessment was reopened on the basis of the same receipts of Rs.64,23,832/- and Rs.84,75,415/- which were taken in the total turnover in original scrutiny assessment and reopening of assessment again on the basis of same issues amounted to change of opinion not permissible under the provisions of Act. It was held that AO had no power to review; he had the power to re-assess. But re-assessment had to be based on fulfillment of certain pre-condition and if the concept of “change of opinion” was removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of “change of opinion” as an in-built test to check abuse of power by the AO. Hence, after 1.4.1989, AO had power to re-open, provided there was “tangible material” to come to the conclusion that there was escapement of income from assessment. Therefore, the re-assessment u/s 144 r.w.s. 147 was rightly quashed by the ld CIT(A).
FULL TEXT OF THE ORDER OF ITAT SURAT
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