Ram Fashion Exports Private Limited Vs DCIT (ITAT Chennai)
Reassessment Beyond Four Years Invalid in Absence of Failure to Fully and Truly Disclose Material Facts – Mere Change of Opinion Not Permissible
The appellant is an exporter of leather footwear. It filed IT return for AY 2013-14 on 29.09.2013. The return was selected for scrutiny under section 142(1) and (2). It replied. Assessing officer passed assessment order under section 143(3) accepting the returned income (but for minor variation). However; notice under section 148 was issued; after expiry of four years; on 14.03.2019. The reasons recorded by the AO prior to re-opening of assessment was scrutiny of case records. Assessment was reopened. Hence; appeal was filed.
Hon’ble ITAT, Chennai set aside the order and allowed the appeal. It held: (i) Quietus of the completed assessment is the fundamental rule and exception to this rule is Re-opening of assessment by A0 under section 147 or exercise of Revisional jurisdiction by CIT under section 263 of the Act. Therefore, there are safeguards provided; which are sine qua non for assumption of jurisdiction; (ii) reason to suspect; howsoever strong; cannot replace reason to believe; (iii) escapement of income was has to be due to fault of the assessee, in not fully and truly disclosing the material facts at the time of original assessment; this is not satisfied in the present case; (iv) relies on Supreme Court ruling in Kelvinator; to hold mere change of opinion cannot be a ground to reopen assessment; (v) accordingly; quashes the order and allows the appeal.
