Case Note & Summary
The petitioner, Nuclear Power Corporation of India Limited, a Government Corporation engaged in generation of electricity from atomic energy, filed its return of income for Assessment Year 2015-16 on 30 September 2015 declaring a total loss of ₹240,87,30,919 under normal provisions and book profit of ₹2911,17,90,229 under section 115JB of the Income-tax Act, 1961. The case was selected for scrutiny and an assessment order under section 143(3) was passed. Subsequently, the Deputy Commissioner of Income Tax issued a notice under section 148 dated 27 March 2021 seeking to reopen the assessment on the ground that income chargeable to tax had escaped assessment under section 147. The petitioner filed objections, which were rejected by an order dated 2 December 2021. The petitioner challenged both the notice and the rejection order before the Bombay High Court. The court examined the reasons recorded for reopening and found that the only ground was that the petitioner had claimed deduction under section 80IA of the Act, which was allegedly not allowable. However, the court noted that during the original scrutiny assessment, the Assessing Officer had specifically asked for details regarding the deduction under section 80IA and had allowed it after due consideration. The court held that the reopening was based on the same set of facts already examined and no fresh tangible material was brought on record. The court further held that the order rejecting objections was a non-speaking order and did not address the petitioner's contention of change of opinion. The court quashed the notice under section 148 and the order rejecting objections, allowing the writ petition.
Headnote
A) Income Tax - Reassessment - Section 147, 148 Income-tax Act, 1961 - Reopening of Assessment - The petitioner challenged a notice under section 148 dated 27 March 2021 for AY 2015-16 and the order rejecting objections dated 2 December 2021. The court held that the reopening was based on the same set of facts already examined during the original scrutiny assessment under section 143(3), and no fresh tangible material was brought on record. The reassessment was therefore invalid as a mere change of opinion. (Paras 1-10) B) Income Tax - Reassessment - Section 147, 148 Income-tax Act, 1961 - Change of Opinion - The court held that where the Assessing Officer had already considered the issue of deduction under section 80IA during the original assessment and allowed it after due application of mind, reopening on the same ground without any new material amounts to a change of opinion, which is not permissible under law. (Paras 8-10) C) Income Tax - Reassessment - Section 147, 148 Income-tax Act, 1961 - Objections - The court noted that the order rejecting objections was a non-speaking order and did not address the petitioner's contention that the reopening was based on a change of opinion. The court quashed both the notice and the order. (Paras 9-10)
Issue of Consideration
Whether the notice under section 148 of the Income-tax Act, 1961 for reopening assessment for AY 2015-16 was valid when based on the same material already considered during original assessment under section 143(3).
Final Decision
The court allowed the writ petition and quashed the notice under section 148 dated 27 March 2021 and the order dated 2 December 2021 rejecting objections.
Law Points
- Reassessment notice under section 148 must be based on fresh tangible material
- not mere change of opinion
- reopening after four years requires failure to disclose material facts fully and truly
- reasons recorded must show nexus with income escaping assessment
- objections to reopening must be disposed of by speaking order
