Bharat Petroleum Corporation Ltd. Vs ACIT (Bombay High Court)
Bombay High Court held that reopening of assessment under section 148 of the Income Tax Act merely on the basis of change of opinion is not sustainable in law. Also, held that reassessment proceedings are initiated after four years without failure to disclose fully and truly all the material facts hence the same cannot be sustained.
Facts- The Petitioner is a Company engaged in the business of refining of crude oil and marketing of petroleum and petrochemical products and lubricants and is a regular Assessee under the IT Act. Vide the present petition, the petitioner challenges the legality and validity of the impugned Notice issued under Section 148 of the IT Act for AY 2013-14 and AY 2015-16. Additionally, the Petitioner also challenges the impugned Order rejecting the objections filed by the Petitioner to the validity of the impugned Notice.
Conclusion- Held that the reopening in the present case is merely based on a “change of opinion”, which is impermissible. As can be seen from the reasons for reopening, the only real reason given is that the BPCL Trust is not a company and hence not covered under Section 115-O of the Act. Therefore, the amount distributed by it to the Petitioner would not qualify as exempt dividend income under Section 10(34) of the Act. This to our mind would be merely a “change of opinion”. We say this for the simple reason that even if we assume for the sake of argument that this exemption was wrongly allowed by the Assessing Officer in the scrutiny assessment proceedings, the same cannot be the sole ground for reopening the assessment and invoking the provisions of Section 147 r/w Section 148 of the IT Act. Merely because the Assessing Officer is now of the opinion that the deduction is wrongly granted, cannot invest him with the jurisdiction to reopen the assessment, especially in a case where reassessment proceedings are initiated when there is already a scrutiny assessment under Section 143(3) and which is after a period of 4 years from the date of the relevant assessment year and there has been no failure to disclose fully and truly all material facts in relation to the concerned assessment year.
