Case Note & Summary
The petitioner, Aroni Commercials Limited, challenged a notice dated 28 March 2013 under Section 148 of the Income Tax Act, 1961 seeking to reopen its assessment for Assessment Year 2008-09, along with the subsequent order rejecting objections and the assessment order dated 19 December 2013. The Assessing Officer had originally completed the assessment under Section 143(3) on 30 November 2010, allowing a deduction under Section 80IB of the Act. The reopening notice alleged that the deduction was wrongly allowed because the unit was not eligible. The petitioner objected, arguing that the reopening was based on a change of opinion, as the eligibility had been examined during the original assessment. The Assessing Officer rejected the objections on 20 November 2013 and passed the reassessment order on 19 December 2013, disallowing the deduction. The revenue raised a preliminary objection that the petition should be dismissed because an assessment order had been passed and the petitioner could file an appeal. The petitioner contended that the reopening was without jurisdiction and that the writ petition was maintainable. The Court, relying on Asian Paints Limited v. Deputy Commissioner of Income Tax (2008) 296 ITR 90 (Bom), held that reopening based on a change of opinion is invalid. The Court found that the original assessment had examined the eligibility for deduction under Section 80IB, and the reopening notice did not disclose any new tangible material. Therefore, the notice, the order rejecting objections, and the reassessment order were quashed. The Court allowed the writ petition, setting aside the impugned orders.
Headnote
A) Income Tax - Reopening of Assessment - Section 148 of Income Tax Act, 1961 - Change of Opinion - The Assessing Officer reopened assessment on the ground that the assessee had claimed deduction under Section 80IB of the Act in respect of a unit which was not eligible, but the same issue had been examined and allowed in the original assessment. The Court held that reopening based on a change of opinion is not permissible, as there was no fresh tangible material to justify reopening. (Paras 2-10) B) Income Tax - Writ Jurisdiction - Maintainability - Article 226 of Constitution of India - Despite the assessment order being passed, the writ petition challenging the reopening notice is maintainable when the reopening is without jurisdiction, as the assessee had no opportunity to challenge the reopening before the assessment was completed. (Paras 3-5)
Issue of Consideration
Whether the reopening of assessment under Section 148 of the Income Tax Act, 1961 is valid when based on a change of opinion, and whether a writ petition challenging the reopening is maintainable after the assessment order has been passed.
Final Decision
The writ petition is allowed. The notice dated 28 March 2013 under Section 148, the order dated 20 November 2013 rejecting objections, and the assessment order dated 19 December 2013 for A.Y. 2008-09 are quashed and set aside.
Law Points
- Reopening of assessment under Section 148 of Income Tax Act
- 1961 cannot be based on mere change of opinion
- Reassessment notice must be based on tangible material
- Writ petition maintainable despite passing of assessment order if reopening is without jurisdiction
