Rao Tradelink Private Limited Vs ITO (Gujarat High Court)
Gujarat High Court held that reopening of assessment under section 148 of the Income Tax Act is mere change of opinion since there is no failure on part of assessee as to full and true disclosure. Accordingly, reassessment is liable to be quashed and set aside.
Facts- The petitioner, during the year under consideration, was engaged in the business of trading in textile fabrics and made certain purchases from Ruchita Chemicals LLP in the normal course of business and made various payments against such purchases to the said party. The petitioner has assailed the notice dated 31.03.2024 issued by the respondent under the provisions of Section 148 of the Income Tax Act, 1961 seeking reopening of the income-tax assessment of the petitioner for the Assessment Year (AY) 2017-18.
Conclusion- Held that if there is no failure on the part of the assessee as to full and true disclosure, and the assessment has been threadbare examined and approved after calling for detailed explanation, the reopening of the assessment can be said to be premised on a change of opinion. Thus, the petitioner cannot be subjected to further reassessment in view of such vague observations recorded by the AO, particularly when the return of the petitioner had been accepted after detailed scrutiny of the documents presented by the petitioner, disclosing the purchases with Ruchita Chemicals LLP. Thus, on an overall appreciation of the facts and documents on record, we are of the opinion that the reopening of the assessment is nothing but a change of opinion by the AO and hence, the petitioner cannot be subjected to further scrutiny of reassessment.
