Court allows Writ Petition, invalidates reassessment based on disclosed facts, no new material.

The court allowed the Writ Petition, setting aside the Impugned Order dated 17.09.2019, and concluded that the reassessment proceedings were invalid. The court emphasized that all material facts were disclosed by the Petitioner, there was no new material justifying the reassessment, and the reassessment was based on a mere change of opinion and invalid audit objections.

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Issues Involved:
1. Justification for reopening the assessment under Section 147 of the Income Tax Act.
2. Procedure followed in reassessment cases.
3. Validity of reassessment after four years.
4. Full and true disclosure by the assessee.
5. Reassessment based on change of opinion.
6. Reassessment based on audit objections.
7. Alternative remedy and jurisdiction of the court.

Issue-wise Detailed Analysis:

1. Justification for Reopening the Assessment:
The primary question was whether the authorities were justified in reopening the assessment for the assessment year 2012-2013 under Section 147 of the Income Tax Act, based on the claim that certain items had escaped assessment. The Petitioner had filed income tax returns and the assessment was initially processed under Section 143(1) and later under Section 143(3) with a "Nil" tax payable order. The reopening notice under Section 148 was issued without new tangible material, and the reasons given did not allege non-disclosure of any information by the Petitioner.

2. Procedure Followed in Reassessment Cases:
The court referred to the Supreme Court's decision in GKN Driveshafts (India) Limited v. Income Tax Officer, which mandates that the assessing officer must provide reasons for reopening the assessment and dispose of any objections by passing a speaking order. In this case, the reasons for reopening were based on the same material previously reviewed, and the audit objections had already been addressed and dismissed by the assessing officer.

3. Validity of Reassessment After Four Years:
The court examined whether the reassessment was permissible after four years from the end of the relevant assessment year. According to Section 147, reassessment after four years is only permissible if there was a failure on the part of the assessee to disclose fully and truly all material facts. The court found that all material facts were disclosed by the Petitioner, and there was no new material justifying the reassessment.

4. Full and True Disclosure by the Assessee:
The court noted that the Petitioner had disclosed all relevant facts during the original assessment, including details of shares bought back and the consideration paid, which were part of the financial statements and cash flow statements. The court concluded that there was no failure on the part of the Petitioner to disclose fully and truly all material facts.

5. Reassessment Based on Change of Opinion:
The court held that reassessment based on a mere change of opinion is invalid. The original assessment had already considered the disclosed facts, and the reopening was based on the same material without any new information. The court cited previous judgments, including S.Sreeramachandra Murthy and ors. v. Deputy Commissioner of Income Tax, which established that mere change of opinion does not justify reassessment.

6. Reassessment Based on Audit Objections:
The court addressed whether reassessment based on audit objections is valid. It referred to the Supreme Court's decision in Indian & Eastern Newspaper Society v. Commissioner of Income-tax, which held that the opinion of an internal audit party on a point of law cannot be regarded as "information" for the purpose of Section 147(b). The court found that the audit objections had already been addressed and dismissed by the assessing officer, and reopening the assessment based on these objections was not justified.

7. Alternative Remedy and Jurisdiction of the Court:
The court considered the argument that the Petitioner should have availed the alternative remedy of appeal. However, it concluded that since the reassessment proceedings were found to be illegal and incorrect, there was no justification to direct the Petitioner to avail the alternative remedy.

Conclusion:
The court allowed the Writ Petition, setting aside the Impugned Order dated 17.09.2019, and concluded that the reassessment proceedings were invalid. The court emphasized that all material facts were disclosed by the Petitioner, there was no new material justifying the reassessment, and the reassessment was based on a mere change of opinion and invalid audit objections.

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