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Prithvi Apartments Co-operative Housing Society Limited Vs ACIT (Bombay High Court)
Bombay High Court held that since issue already examined during the course of assessment proceedings, re-opening of assessment on same issue amounts to change of opinion. Thus, re-opening based on change of opinion is not sustainable. Accordingly, notice u/s. 148 quashed and set aside.
Facts- This Petition challenges notice under Section 148 of the Act dated 31.03.2021 for the assessment year 2014 -15. In this case, an assessment order under Section 143(3) of the Act was passed on 07.12.2016. The impugned notice under Section 148 is dated 31.03.2021 i. e. after a period of four years from the end of the relevant assessment year.
Conclusion- Held that the issue was examined during the course of the assessment proceedings and therefore, any attempt to re-open the case on these two issues would amount to re-opening on the basis of change of opinion and review of the earlier order passed under Section 143(3) of the Act. This is not permissible under the Act which confers the power to re-open the case under Section 147 of the Act. In view of above, there being no allegation of failure to disclose fully and truly all material facts necessary for the assessment and the issues having examined during the course of the original assessment proceedings, the impugned notice under Section 148 of the Act dated 31.03.2021 seeking to re-open concluded assessment of assessment year 2014 – 15 is quashed and set aside.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Heard learned Counsel for the parties.
2. Rule is made returnable forthwith. By consent, the Petition is taken up for final hearing, since the pleadings in this case are completed.
3. This Petition challenges notice under Section 148 of the Act dated 31.03.2021 for the assessment year 2014 -15.
4. In this case, an assessment order under Section 143(3) of the Act was passed on 07.12.2016. The impugned notice under Section 148 is dated 31.03.2021 i. e. after a period of four years from the end of the relevant assessment year.
5. The reasons recorded for re-opening the concluded assessment which were furnished to the Petitioner on 18.11.2021 read as under :-
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6. The pre-condition as per first proviso to Section 147 of the Act for re-opening the case, where an assessment order under Section 143(3) is passed and the case is to be re-opened after a period of four years is that there has to be failure to disclose fully and truly all material facts necessary for the assessment.
7. On a perusal of the reasons recorded which are reproduced above, there is no allegation of any failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. Even on a perusal of the reasons recorded, the said pre-condition cannot be discerned with even in the absence of such allegation. Paragraph Nos. 2 to 6 categorically admit that the reasons are based on verification of the profit and loss account and the other relevant records. If that be so, we fail to understand how the pre-condition specified in first proviso to Section 147 of the Act is satisfied. Therefore, on this short ground itself, the re-opening notice under Section 148 dated 31.03.2021 for assessment year 2014 -15 is required to be quashed and set aside.
8. Even otherwise, the issue of eligibility of interest under Section 80P was a subject matter of investigation in the course of the regular assessment proceedings and same is evident from paragraph 3 of the original assessment order, wherein the issue of deduction under Section 80P is discussed. Insofar as the issue of disallowance under Section 40(a)(ia) is concerned, a query was raised by the Respondents in the course of the assessment proceedings vide notice dated 18.07.2016 and same was replied by the assessee vide letter dated 09.11.2016, wherein all the details with respect to the TDS were furnished. The details are also filed along with this Petition from page 125 to 135. Therefore, on both these grounds i. e. deduction under Section 80P and disallowance for non-deduction of TDS, the issue was examined during the course of the assessment proceedings and therefore, any attempt to re-open the case on these two issues would amount to re-opening on the basis of change of opinion and review of the earlier order passed under Section 143(3) of the Act. This is not permissible under the Act which confers the power to re-open the case under Section 147 of the Act.
9. In view of above, on both the grounds i. e. there being no allegation of failure to disclose fully and truly all material facts necessary for the assessment and the issues having examined during the course of the original assessment proceedings, the impugned notice under Section 148 of the Act dated 31.03.2021 seeking to re-open concluded assessment of assessment year 2014 – 15 is quashed and set aside.
10. Rule is made absolute in the above terms.
11. Accordingly, the Petition stands disposed of.
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