2016 (10) TMI 360 - HC - Income Tax

High Court quashes assessment reopening notice for 2005-06 citing lack of valid reasons. Assessments cannot be reopened without new material.

AMALTAS ASSOCIATES Versus INCOME TAX OFFICER

AMALTAS ASSOCIATES Versus INCOME TAX OFFICER - [2016] 389 ITR 340 Issues:Challenging a notice to reopen assessment for the assessment year 2005-06 based on deduction under section 80IB(10) of the Income Tax Act, 1961.Analysis:1. Notice to Reopen Assessment:The petitioner challenged a notice issued by the Assessing Officer to reopen the assessment for the assessment year 2005-06 based on the deduction claimed under section 80IB(10) of the Income Tax Act, 1961. The original assessment was completed under section 143(3) of the Act, where a part of the deduction claimed was disallowed. The reasons recorded for reopening highlighted discrepancies related to the ownership of land and permission from AUDA, suggesting that the petitioner was not the developer but a contractor. The petitioner objected to the notice, arguing that the issue had already been scrutinized in the original assessment.2. Legal Arguments:The petitioner contended that the Assessing Officer, having already examined the deduction claim in the original assessment, cannot reopen the assessment on the same grounds. Reference was made to a previous judgment by the High Court in a similar case where the claim of deduction was upheld. The department, however, argued that the question of whether the petitioner acted as a developer or contractor was not considered during the original assessment, justifying the reopening.3. Judicial Analysis:The High Court analyzed the reasons recorded for reopening and found them lacking in validity. It noted that the issue raised for reopening was already covered by a previous judgment of the Court, which was affirmed by the Supreme Court. The Court emphasized that the Assessing Officer cannot reexamine an aspect of the claim that was already scrutinized during the original assessment, especially when the petitioner had provided detailed responses and evidence. The Court also highlighted that the Assessing Officer did not rely on any new material outside the record to justify the reopening.4. Conclusion:In light of the above analysis, the High Court quashed the impugned notice to reopen the assessment for the assessment year 2005-06. The Court allowed the petition, emphasizing that the reasons recorded by the Assessing Officer lacked validity. The judgment reaffirmed the principle that an assessment cannot be reopened on the same grounds already examined during the original assessment, especially when supported by previous judicial decisions.