Reopening despite submission of all facts in relation to deduction claimed by assessee during original assessment is impermissible

Brief about the case 

The Assessing Officer had issued notice u/s 148 of IT act to reopen the assessment of the AY 2007-08 giving reasons to believe that there was non-disclosure of all facts with respect to deduction u/s 10A by the assessee and the assessee had taken the deduction without setting off the loss of one unit.

The assessee, on the other hand, asserted that complete facts were before the Assessing Officer during the course of original assessment and it has been referred in the course of passing of the assessment order. Thus the High court held that reopening assessment would be a clear case of revisiting claim which was clearly impermissible.

Facts of the case:

• The assessee company is engaged in business of development and export of software. The assessee had filed a return of income for AY 2007-08 declaring an income of 2,76,74,434/- and the deduction u/s 10A was elaborated in Schedule 10A.
• The case was selected for scrutiny and the assessment was completed under section 143(3) read with section 144C (13) of the IT Act, assessing the total income at `115, 90, 05,170/-.
• During the course of assessment proceedings, a questionnaire was forwarded to the assessee raising a specific query in relation to the deduction claimed u/s 10A which was replied and corroborated by relevant documentation to the satisfaction of Assessing Officer. The Assessing officer passed the order allowing the said deduction.
• The Assessing officer issued reassessment notice u/s 148 of IT act giving reasons to believe that there was non-disclosure of true facts with respect to deduction u/s 10A by the assessee thereby leading to wrong allowing of deduction by the Assessing Officer.
• The assessee objected to the reassessment order by stating that complete facts were before the Assessing Officer during the course of the original assessment. The assessee contemplated that the reasons for reassessment was merely the change of opinion.
• 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 deduction based on a different opinion is clearly impermissible by law.

Contention of the Revenue