TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Court quashes reassessment notices for 1986-87 income year. Section 147 limits reassessment to new material.</h1> <h3>Garden Silks Mills Pvt. Ltd. Versus Deputy Commissioner Of Income-Tax</h3> Garden Silks Mills Pvt. Ltd. Versus Deputy Commissioner Of Income-Tax - [1999] 237 ITR 668, 151 CTR 533, 106 TAXMANN 620 Issues Involved:1. Validity of notices u/s 148 for reassessment.2. Applicability of section 43B adjustments.3. Change of opinion by the Assessing Officer.4. Jurisdiction of the Assessing Officer under section 147.Summary:1. Validity of Notices u/s 148 for Reassessment:The petitioner, a private limited company and an assessee under the Income-tax Act, 1961, challenged the notices issued u/s 148 for reassessment of its income for the assessment year 1986-87. The notices were issued on March 7, 1990, and subsequently on March 27, 1991, after the initial notice was withdrawn. The petitioner contended that the question about the operation of section 43B had been duly considered by the Assessing Officer during the original assessment, and the claim was allowed after application of mind, supported by the decision in Lakhanpal National Ltd. v. ITO [1986] 162 ITR 240.2. Applicability of Section 43B Adjustments:The petitioner had adjusted the value of opening and closing stock by excluding the component of customs duty as a consequence of its treatment under section 43B. This adjustment was in line with the decision in Lakhanpal's case, which had not been reversed or overruled. The Assessing Officer had allowed this adjustment during the original assessment after making inquiries and considering the petitioner's claims.3. Change of Opinion by the Assessing Officer:The court opined that section 147 does not confer jurisdiction on the Assessing Officer to review his own order on a mere change of opinion. The reasons recorded by the Assessing Officer for issuing the notice disclosed that the case was nothing but a mere change of opinion on facts already before the Assessing Officer during the original assessment. The court reiterated that mere change of opinion does not confer jurisdiction to initiate reassessment proceedings.4. Jurisdiction of the Assessing Officer under Section 147:The court emphasized that for the Assessing Officer to have jurisdiction u/s 147, there must be material having a reasonable nexus to the formation of the opinion about escapement of income. The reasons recorded by the Assessing Officer did not disclose any new material or error that would justify reopening the assessment. The reference to the decision in CIT v. British Paints India Ltd. [1991] 188 ITR 44 was found to be irrelevant to the controversy at hand.Conclusion:The court quashed the impugned notices for initiating reassessment proceedings for the assessment year 1986-87, holding that the reasons recorded by the Assessing Officer disclosed no more than a mere change of opinion. The petitions succeeded, and the rule was made absolute in each case, with no order as to costs.
TaxTMI 