Case Law Details
Brief of the case:
Madras High Court held in CIT Vs M/s Schwing Stetter India P Ltd that the case only be opened for re-assessment u/s 147 only if there was a tangible material in the hand of AO , it could not be opened just because of the change in the opinion of AO.
Facts of the case:
The assessee was engaged in the business of manufacturing concrete mixtures, concrete pumps, etc and filed ROI declaring total income of Rs 1,36,15,445/- and the same was selected for scrutiny in which the total income was determined at Rs 1,40,40,250/-.After that AO issued notice u/s 148 for re-assessment on the basis of change in opinion that MODVAT was excess adjusted by the assessee.
Contention of the assessee:
Assessee was of the view that as all the documents and proofs which would justify the MODVAT received had already been submitted before the AO and the basis on which the case was reopened, was the same which had already been submitted and discussed with AO during scrutiny proceedings. There was not any new tangible material related with MODVAT on the basis of which the AO was reopening the assessment. So there was merely a change in opinion on the basis of which case could not be reopened. So the order of AO should be quashed.
Contention of the Revenue:
Revenue was of the view that mere production of profit & Loss A/c for considering the MODVAT would not amount to proper disclosure to calculate the MODVAT so the case should be reopened.
Held by High Court:
High Court held that for reopening the assessment there should be tangible material in the hand of AO. Merely change in opinion of the AO could not make the case reopened.AO could only reassess the case not review its case. Reopening of case on merely change in opinion amounted to review of its own case by AO which was against the IT act. So the appeal of revenue was dismissed.
Following Apex Courts judgement in Kelvinator case upholding Delhi High Courts decision.