Court quashes notice under Income Tax Act for assessment reopening, citing impermissible change of opinion.

The court quashed the notice issued under Section 148 of the Income Tax Act, 1961, for reopening the assessment for the year 2010-11. It held that the reopening was based on a change of opinion, which is impermissible as the Assessing Officer had already examined the issue of share application money from M/s Glamour Sales Pvt. Ltd. during the original assessment without making any additions. The reasons for reopening were deemed invalid, and the court concluded that the assessment reopening lacked jurisdiction, ultimately allowing the petition.

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Issues Involved:
1. Legality of the notice issued under Section 148 of the Income Tax Act, 1961 for reopening the assessment.
2. Whether the reopening of the assessment is based on a change of opinion.
3. Validity of the reasons recorded for reopening the assessment.
4. Examination of the identity, creditworthiness, and genuineness of the transaction with M/s Glamour Sales Pvt. Ltd.

Detailed Analysis:

1. Legality of the Notice Issued Under Section 148 of the Income Tax Act, 1961 for Reopening the Assessment:
The petitioner challenged the notice dated 24.03.2015 issued under Section 148 of the Income Tax Act, 1961, seeking to reopen the assessment for the assessment year 2010-11. The petitioner argued that the reopening was based on a mere change of opinion, which is not permissible under the law. The court noted that the assessment was initially completed under Section 143(3) of the Act, where the Assessing Officer had examined the issue of share application money received from M/s Glamour Sales Pvt. Ltd. and had not made any additions. Therefore, the reopening of the assessment on the same grounds was not justified.

2. Whether the Reopening of the Assessment is Based on a Change of Opinion:
The court observed that during the original assessment proceedings, the Assessing Officer had called for details from M/s Glamour Sales Pvt. Ltd. under Section 133(6) of the Act, and the company had duly furnished the required information. The assessment was completed without making any additions regarding the share application money. The court held that reopening the assessment on the same grounds constituted a change of opinion, which is not permissible. The court cited the case of Gujarat Power Corporation Ltd. v. Assistant Commissioner of Income Tax, where it was held that reopening an assessment on the same grounds is not permissible if the Assessing Officer had already examined the issue during the original assessment proceedings.

3. Validity of the Reasons Recorded for Reopening the Assessment:
The reasons recorded for reopening the assessment stated that the investor company, M/s Glamour Sales Pvt. Ltd., was not found at the given address during the assessment proceedings for the assessment year 2012-13. The court noted that during the original assessment proceedings for the assessment year 2010-11, M/s Glamour Sales Pvt. Ltd. had responded to the notice under Section 133(6) and had furnished the necessary details. Therefore, the reasons recorded for reopening the assessment were not valid. The court emphasized that the validity of the reopening has to be examined based on the reasons recorded and cannot be supplemented by the order disposing of the objections or by filing an affidavit.

4. Examination of the Identity, Creditworthiness, and Genuineness of the Transaction with M/s Glamour Sales Pvt. Ltd.:
The court observed that the Assessing Officer had examined the issue of share application money received from M/s Glamour Sales Pvt. Ltd. during the original assessment proceedings and had not made any additions. The court noted that the reasons recorded for reopening the assessment did not establish that M/s Glamour Sales Pvt. Ltd. was a fictitious entity or that the transactions were not genuine. The court held that the reopening of the assessment was based on a mere change of opinion and was, therefore, without jurisdiction.

Conclusion:
The court allowed the petition and quashed the impugned notice dated 24th March 2015 issued under Section 148 of the Income Tax Act, 1961. The court held that the reopening of the assessment was based on a mere change of opinion and was, therefore, not permissible. The court emphasized that the reasons recorded for reopening the assessment were not valid and that the Assessing Officer had already examined the issue during the original assessment proceedings.

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