Case Note & Summary
The petitioner, an individual, filed his return of income for Assessment Year 2013-14 declaring total income of Rs. 65,51,360/-. The return was accepted by the assessing officer under Section 143(1) of the Income Tax Act, 1961. Subsequently, the assessing officer issued a notice dated 28.3.2018 under Section 148 of the Act seeking to reopen the assessment. The reasons recorded for reopening stated that on verification of the ITR, it was seen that the assessee had worked out long-term capital gains on sale of a flat by taking the year of acquisition as 1992 and computing indexed cost of acquisition accordingly. The assessing officer noted that during assessment proceedings for A.Y. 2014-15, the assessee was requested to provide sources of investments made during that year. The petitioner challenged the notice on the ground that it was based on a mere change of opinion as there was no fresh material. The court, after hearing both sides, held that the reasons for reopening did not disclose any new tangible material and were based on the same return already processed under Section 143(1). The court quashed the notice, observing that reopening on the same set of facts without fresh material amounts to a change of opinion, which is not permissible under the law.
Headnote
A) Income Tax - Reopening of Assessment - Section 147, 148 Income Tax Act, 1961 - Change of Opinion - The assessing officer issued a notice to reopen assessment for A.Y. 2013-14 based on verification of the ITR which showed the assessee had used the cost inflation index for the year of acquisition as 1992 for computing long-term capital gains on sale of a flat. The court held that the reasons for reopening did not disclose any fresh material and were based on the same return already processed under Section 143(1), thus amounting to a mere change of opinion. The notice was quashed. (Paras 1-6) B) Income Tax - Processing under Section 143(1) - Section 143(1) Income Tax Act, 1961 - Scope of Reassessment - The court observed that when a return is processed under Section 143(1) without scrutiny, the assessing officer cannot later reopen the assessment on the same set of facts without any new tangible material. The impugned notice was based on the same ITR which was already accepted, and no new information was brought on record. (Paras 3-6)
Issue of Consideration
Whether the notice for reopening of assessment under Section 148 of the Income Tax Act, 1961 was valid when based on the same material already considered during the original assessment, constituting a mere change of opinion.
Final Decision
The court allowed the petition and quashed the notice dated 28.3.2018 issued under Section 148 of the Income Tax Act, 1961.
Law Points
- Reopening of assessment
- change of opinion
- lack of fresh material
- Section 147
- Section 148
- Income Tax Act
- 1961
