DCIT Vs Bank of Baroda (ITAT Mumbai)
Reopening U/s 147 Quashed – Audit Objection Not Tangible Material After 4 Years – Bad Debt MAT Issue Fails – ITAT Mumbai
The Revenue challenged CIT(A)’s order quashing reassessment initiated u/s 147 relating to MAT computation and bad debts written off of ₹907 Cr. The reopening was issued after four years mainly based on a revenue audit objection alleging wrong allowance while computing book profit u/s 115JB.
ITAT held that reassessment beyond four years is permissible only if there is failure by the assessee to disclose fully & truly all material facts. In this case, all details were already on record during original scrutiny, subsequent 263 proceedings and orders giving effect. The Tribunal noted that reopening based merely on audit opinion or existing material amounts to change of opinion and is legally invalid.
Relying on decisions including Indian & Eastern Newspaper Society (SC), Adani Power Rajasthan Ltd. (SC) and Bombay HC ruling in Godrej & Boyce, ITAT upheld CIT(A)’s view and quashed the reassessment notice and order. Consequently, Revenue’s appeals and assessee’s cross objections were dismissed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
These appeals are filed by the Revenue and the and cross objections by the assessee, challenging the order of the Learned Commissioner of Income Tax Appeal, Mumbai (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (“NFAC” for short) passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), pertaining to the Assessment Year (‘A.Y.’ for short) 2015-16 & 2016-17. As the facts are identical, we hereby pass a consolidated order by taking ITA No.4913/M/2025 and CO No.259/M/2025 pertaining to A.Y. 2015-16 as the lead case.
