Khajamohiaddin Ghousemohiaddin Syed Vs ITO (ITAT Mumbai)
Second Bite at the Same Cherry Not Allowed— Reopening on Same Issue is Pure Change of Opinion Reassessment Quashed
Assessee engaged in civil construction filed revised return declaring income of Rs.40,01,190/-. Original assessment u/s 143(3) r.w.s. 144 dated 28/03/2016 determined income at Rs.1,33,63,668/- by applying presumptive rate of 8% u/s 44AD on gross receipts of Rs.16,70,45,850/-, after rejecting the books due to absence of supporting evidence for expenses. This original addition was already the subject matter of appeal pending before CIT(A).
Subsequently, AO issued notice u/s 148 on 31/03/2021 & initiated reassessment u/s 147. In the recorded reasons, AO stated that application of 44AD in the original assessment was incorrect since Assessee’s turnover exceeded Rs.1 crore & AO should have instead disallowed entire P&L expenses. In reassessment, AO proceeded to disallow 75% of expenses & made addition of Rs.4,17,61,462/-. CIT(A) upheld the reassessment.
Tribunal observed that the very same issue-verification of expenses & application of 44AD—was already examined in the original assessment. No new tangible material was brought on record. AO merely revisited the very same facts to take a different view. It is settled law that AO cannot review his own order in the garb of reopening. Tribunal relied on jurisdictional Bombay High Court decision in Kalpataru Land Pvt Ltd v ACIT (136 taxmann.com 434), affirmed by Supreme Court (145 taxmann.com 77), holding that reopening on the same material amounts to impermissible change of opinion.
