PCIT Vs Ramanathan Adaikalavan (Madras High Court)
The Madras High Court dismissed the appeal of the Revenue & upheld the ITAT’s order quashing reassessment proceedings u/s 148.
Assessee had filed his return u/s 139 along with the balance sheet & tax audit report u/s 44AB. In the original scrutiny assessment u/s 143(3), AO had examined the claim of long-term capital gains arising on sale of capital assets. Subsequently, the case was selected under CASS on the ground of “low capital gain vis-à-vis sale consideration”. A notice u/s 148 was issued, seeking to reopen the assessment.
Revenue argued that certain schedules relating to Assessee’s investments had escaped the attention of AO during the original scrutiny & that Assessee was not entitled to certain benefits claimed on LTCG. According to the Revenue, ITAT erred in treating the reassessment as a mere change of opinion.
The High Court, however, noted that the notice u/s 148 only called for details which were already part of the record at the time of original scrutiny. No new tangible material or fresh information had been brought to light to justify reopening. It was evident that the basis for reassessment was nothing but a change of opinion on the very same set of facts examined earlier.
