No new addition can be made in reopening on issue duly considered during original proceeding

Brief of the Case

Delhi High Court held In the case of Shri Parasram Industries Pvt. Ltd. vs. ITO that the present case is related to change of opinion. This is so, because in the questionnaire, the AO specifically raised the issue with regard to the validity of shareholdings. The responses were given by the assessee from time to time and what is more important is that the Assessing Officer had directly issued letters to all the share applicants, who had, in turn, given their confirmations along with their PAN numbers and bank details. After having received the said information, the Assessing Officer did not think it fit to make an addition and that itself would amount to forming an opinion. Therefore, the present exercise of issuing the notice under Section 148 would be nothing but one of change of opinion, which is impermissible.

Facts of the Case

In this case, the AO received information about receipt of accommodation entries from the investigation Wing. The AO observed that the said information was not received at the time of original assessment. Accordingly, he formed an opinion that he has reason to believe that income has escaped assessment and issued notice u/s 148. The main grounds raised in the writ petition are that the re-assessment proceedings having been initiated after four years from the end of the relevant assessment year required certain pre-conditions to be fulfilled. One of the pre-conditions was that there was failure on the part of the assessee to fully and truly disclose all the material particulars necessary for the assessment. It is contended by the learned counsel for the petitioner that apart from there being no such failure, in fact, there is not even an allegation in the reasons that there has been such a failure on the part of the assessee.

The second ground urged on behalf of the petitioner/assessee is that this is a case of change of opinion inasmuch as the very issue sought to be raked up by way of the impugned notice under Section 148 has been considered by the Assessing Officer during the time of the original assessment under Section 143 (3).

Please become a Premium member. If you are already a Premium member, login here to access the full content.