Assessing Officer Can't Issue Reassessment Notice On Mere 'Change Of Opinion' About Material Already Available At Time Of Scrutiny: Gujarat HC
The Gujarat High Court has reiterated that an Assessing Officer under the Income Tax Act 1961 cannot issue notice for re-assessment of income under Section 148, on mere “change of opinion” on the material which was already furnished by the assessee at the time of scrutiny under Section 143(2).Division bench of Justice Bhargav D. Karia and Justice Niral R. Mehta observed, “In our...
The Gujarat High Court has reiterated that an Assessing Officer under the Income Tax Act 1961 cannot issue notice for re-assessment of income under Section 148, on mere “change of opinion” on the material which was already furnished by the assessee at the time of scrutiny under Section 143(2).
Division bench of Justice Bhargav D. Karia and Justice Niral R. Mehta observed, “In our considered opinion, the assessee– petitioner at the time of filing the original return and thereafter in the scrutiny, has already furnished the requisite details…Thus, in our view, the Assessing Officer forming his opinion on the material already available on record and/or the material which were already considered by the then Assessing Officer, is nothing but a change of opinion.”
The assessment in the case at hand pertained to capital gain entries made by the Petitioner-assessee for the A.Y. 2016-17 and deduction claimed under Section 54F.
Initially, in 2018, a limited scrutiny notice was issued to the petitioner, and upon perusing the material placed on record by the assessee, the then Assessing officer u/s 143(3) had framed the assessment without disturbing the original income declared by the petitioner for the year under consideration.
In 2021 however, the present Assessing Officer issued a re-assessment notice and vide order dated 2nd February, 2022 disposed of Petitioner's objections and held that reopening is justified. Hence, this petition was filed.
The High Court said it is not the case of the Assessing Officer that new information and/or any tangible material has come into possession. “Thus, in our view, forming any opinion based on same facts and circumstances which were then available with the Assessing Officer at the time of scrutiny is said to be change of opinion and thereby the same is not permissible,” it held.
The bench cited the case of Commissioner of Income-tax, Delhi v. Kelvinator of India Ltd. (2010) where the Supreme Court categorically held that permitting an Assessing Officer to reopen past assessments on mere change of opinion would be arbitrary.
As such, the petition was allowed and impugned notice was quashed.
Appearance: Sr. Advocate Tushar Hemani with Advocate Vaibhavi K Parikh for Petitioner; Advocate Karan Sanghani for Respondent
Case title: Hareshkumar Bhupatbhai Panchani v. Income Tax Officer
LL Citation: 2024 LiveLaw (Guj) 139
Case no.: R/SPECIAL CIVIL APPLICATION NO. 5851 of 2022