Reassessment based on change of opinion without any tangible new information unsustainable

Ashraf Chitalwala Vs DCIT (Bombay High Court)

Bombay High Court held that the reopening of the assessment order based on change of opinion without surfacing of any tangible new information is unsustainable in law and liable to be set aside.

Facts- The Petitioner has assailed notice dated 26^th March 2021 issued by the Deputy Commissioner of Income Tax u/s. 148 of The Income Tax Act 1961 seeking to reopen the assessment for the assessment year 2015-16, order dated 24^th March 2022 disposing the objections of the Petitioner and the assessment order dated 24^th March 2022 u/s. 147 of the Act read with Section 143(3) read with Section 144(B) of the Act. Petitioner also seeks an order restraining the Respondents from taking any action pursuant to the assailed orders.

Conclusion- Held that the reopening of the assessment order is clearly on the basis of a change of opinion and that too without surfacing of any tangible new information.

Held that the Petitioner had fully and truly disclosed all material facts necessary for the purpose of assessment. The AO issued the first assessment order after carefully scrutinizing the material furnished by the Petitioner. The Respondents have failed to furnish any reasons for reopening as mandated by law. There is not even a whisper in the entire communication trail as to what was not disclosed. In our view, thus, this is not a case where assessment should be permitted to be reopened on the reasonable belief that income has escaped assessment on account of failure of the assessee to disclose truly and fully or material information necessary for computation of income. Consequently, the notice dated 26^th March 2021, the order disposing objections dated 24^th March 2022, the impugned assessment order and the impugned notice of remand dated 24^th March 2022 as well as the impugned show cause notice for levy of penalty dated 24^th March 2022 are quashed and set aside.

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