Question And Answer
Subject: In the context of Section 148A and 148 of the Income Tax Act
Querist: Ruchi Bhansali
Answered by:
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Date: May 16, 2022
Query asked by Ruchi Bhansali

Assessee is a partnership firm, which filed its return of income for A.Y 2015-16 on due date. The said return was selected for scrutiny and assessment u/s 143(3) was completed accepting the returned income.

On the basis of information available for the past years where 25% of vehicle expenses were disallowed on account of personal nature.  In the assessment completed u/s 143(3) for A.Y 2015-16, no such disallowance was made. Based on this information, AO re-opened the concluded proceedings by issuing notice u/s 148 relying upon provisions of section 148 and 149(1)(b) of the Act. Assessee is of the view that such re-opening is bad in law as it is prohibited under first proviso to section 149(1) of the Act and the issue cannot be treated as information u/s 148 of the Act and also on the ground that it is clear cut change of opinion.

Please Guide.

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Yes, in our view, the same is a clear-cut change of opinion and the contention of change of opinion must be raised. No authority has the power to review its own order unless the same has been statutorily provided.
The Hon’ble Supreme Court in the case of Lily Thomas v. UOI & Ors. (2000) 6 SCC 224 observed that the dictionary meaning of the word “review” is “the act of looking; offer something again with a view to correction or improvement. It cannot be denied that the review is the creation of a statute. The power of review is not an inherent power. It must be conferred by law either specifically or by necessary implication.
The Scheme of Income-tax Act, 1961 has not expressly conferred upon the Ld. Assessing Officer a power of review. It can only rectify apparent mistakes by way or rectification under section 154 of the Act.
Therefore, where a Ld. Assessing Officer on perusal of the documents and explanations submitted by the Assessee during assessment, concluded that the same is not taxable, and cannot change its view without any tangible information or material.

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