On mere change of opinion, the concluded assessment cannot be reopened

Akshaya Souharda Credit Cooperative Limited Vs ITO (ITAT Bangalore)

The issue under consideration is whether A.O. is correct in re-opening of assessment based on the same material on which he relied at the time of assessment u/s 143(3)?

The assessee is a co-operative engaged in providing credit facilities to its members. The assessee filed its return of income, claiming deduction u/s. 80P (2)(a)(i) of the Act. The assessee’s case was selected for scrutiny and the assessment was completed U/s 143(3) of the I.T.Act accepting the returned income. On examination of the financial statements of the assessee, the AO noticed that the assessee had earned interest on FDs kept with Scheduled banks, which had to be taxed as income from other sources u/s 56 the Act. and hence he has re-opened the assessment u/s 147.

ITAT states that it is only a change of opinion as the A.O. already formed an opinion and allowed deduction u/s 80P of the I.T.Act. Further, there is no tangible fresh material on the basis of which assessment is sought to be reopened. On mere change of opinion, the concluded assessment cannot be reopened as held by the Hon’ble Supreme Court in the case of CIT v. Kelvinator of India Ltd. 320 ITR 561 (SC). Further, it is to be noted that for reopening the concluded assessment, the Assessing Officer should form an opinion on the basis of same material which is already on record and not from any external sources, which is not justified in law. Hence ITAT quash the reassessment order.

FULL TEXT OF THE ITAT JUDGEMENT

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