Brief about the case
The Assessing Officer had issued notice u/s 148 of IT act to reopen the assessment giving reasons to believe that assessee’s claim for set off of brought forward unabsorbed depreciation against long term capital gain was not allowable as it was being set off after a lapse of 8 years.
According to the assessee, it had disclosed all material facts fully and truly, in the course of assessment proceedings including all long term capital gains, trial run expenses and bad debts during the course of original assessment proceedings. The assessee further asserted that the Assessing Officer had applied his mind and passed the assessment order on 7.12.2011 being fully satisfied after scrutinizing the particulars. The notice under section 148 seeks to reconsider the same issue and results in change of opinion on the same set of facts and is therefore impermissible by law.
Facts of the case:
- The assessee was assessed for the relevant year and the Assessing Officer had passed order u/s 143(3) as on 07.12.2011.
- The Assessing Officer issued notice u/s 148(1) dated 18.11.2013 calling for reassessment providing the reason to be the disallowance of set off of the brought forward unabsorbed depreciation pertaining to 8 years ago due to non-disclosure of facts by assessee.
- According the Assessing Officer, relying upon the decision of Mumbai High court in the case of Export Credit Guarantee Corporation of India Ltd. Vs. Additional Commissioner of Income Tax and Others that within a period of four years if the Assessing Officer found reason to believe that the income has escaped assessment, it is within his powers to reopen the assessment. He further submitted that in the light of Explanation 2 to section 147, it is a valid ground to recompute the excessive allowance of unabsorbed depreciation.
- The assessee further contended that there was complete disclosure on the part of the assessee of material facts during the course of the assessment and there is an absence of fresh or tangible material on the basis of which the assessment can be reopened.
- On writ appeal, it was held by the Mumbai High Court that the issue of notice u/s 148 for reassessment was not justifiable and to revisit the set off based on a different opinion is clearly impermissible by law.
Contention of the Revenue
