2010 (1) TMI 13 - HC - Income Tax

Court upholds AO's jurisdiction under Section 147; Invalid reassessment orders based on change of opinion

Commissioner of Income Tax Chennai Versus Sri Ravindran Prabhakar Adyar, Chennai

Commissioner of Income Tax Chennai Versus Sri Ravindran Prabhakar Adyar, Chennai - [2010] 326 ITR 363 (Mad) Issues:1. Validity of jurisdiction to reopen assessments under Section 1472. Invocation of provisions of Section 147 without issuing notice under Section 143(2)3. Applicability of proviso to Section 147 in cases completed under Section 143(1)(a)Analysis:Issue 1: Validity of jurisdiction to reopen assessments under Section 147The appeals questioned the validity of the Income Tax Appellate Tribunal's decision to hold that the Assessing Officer lacked jurisdiction to reopen assessments for the years 1995-96 to 2000-01. The Tribunal found that the reassessment orders were bad as they were based on a change of opinion without any other grounds. The Tribunal did not delve into the merits of the case due to this legal finding.Issue 2: Invocation of provisions of Section 147 without issuing notice under Section 143(2)The revenue contended that the communication under Section 143(1) was merely an intimation to furnish details and did not constitute an assessment order. The Tribunal's decision to set aside the reassessment orders based on a change of opinion was challenged. The court emphasized that no materials regarding the Will were presented to the assessing officer at the time of accepting the returns under Section 143(1). The court referred to legal precedent to support the argument that the intimation under Section 143(1) does not amount to an assessment order, thus the question of change of opinion does not arise.Issue 3: Applicability of proviso to Section 147 in cases completed under Section 143(1)(a)The court highlighted that under Section 143(1)(a), the Assessing Officer does not pass an assessment order but sends an intimation. The court referenced legal provisions and circulars to emphasize that the acknowledgment of the return under Section 143(1) does not constitute an assessment. Therefore, the court concluded that the Tribunal's decision to set aside the reassessment orders solely on the ground of a change of opinion was not sustainable.In conclusion, the court set aside the Tribunal's orders and remitted the matter for fresh consideration on the merits of the case without reference to the issue of change of opinion. The appeals were allowed in favor of the revenue, and the substantial questions of law were answered against the assessee.