During the course of original assessment, the assessee\u2019s case entailed active examination and scrutinization lead to the addition of Rs. 10 Crores against the total income offered in the return of income.\u00a0 The AO during the course of original assessment proceedings verified and scrutinized the four aspects set out in the reasons recorded for reassessment.\u00a0 The four issues contained in the reasons for reassessment i.e. the claim of expenditure towards improvements to the leasehold properties, amortization of investments, claim of donation and interest expenses were dealt with by the AO in depth during the original assessment proceedings.\u00a0 However, the reopening initiated based on an internal audit of the Revenue\u2019s functioning which is a mere\u00a0 change of opinion.\u00a0 The Hon\u2019ble Court observed that an essential ingredient of the first proviso to section 147(1) provides that no action for reassessment can be taken after the expiry of four years from the end of the relevant assessment year, unless, there is a failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment, it is a jurisdictional imperative, the Court further observed that the assessee had disclosed all the material facts fully and truly during the original assessment through the audited books of accounts and auditor\u2019s report, duly considered by the AO during the original assessment and thus, the jurisdiction to reopen the concluded assessment has been assumed on mere change of opinion, having the same set of facts and there is no failure on the part of the assessee to disclose truly and fully all the material facts necessary for the assessment. Court held that since the original assessment had been concluded pursuant to scrutiny proceedings and all the four aspects set out in the reasons for reassessment, fully disclosed by the assessee in the original assessment, the reopening of assessment is on mere change of opinion, on same set of facts, arbitrary and illegal and therefore, reassessment proceedings were liable to be quashed.\u00a0 Referred,<\/p>\n
Hindustan Lever Ltd. v. R.B. Wadkar\u00a0 (2004) 137 Taxman 479\/268 ITR 332 (Bom) (HC) (AY. 2015-16)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 147 : Reassessment-After the expiry of four years-No failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment-Reopening of the completed assessment on the basis of same set of facts and on mere change of opinion based on an internal audit of the Revenue\u2019s functioning held illegal and quashed-Sanction is given without application of mind-Reassessment is quashed. [S. 148, 151, Art. 226] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-50813","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-ddz","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/50813","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=50813"}],"version-history":[{"count":2,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/50813\/revisions"}],"predecessor-version":[{"id":58437,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/50813\/revisions\/58437"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=50813"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=50813"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=50813"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}