Tribunal invalidates assessment based on change of opinion; Revenue's appeal dismissed.

The Tribunal upheld the decision of the Ld. CIT(A) to annul the assessment made by the A.O. under section 143(3) / 147 of the Income Tax Act, 1961. The reopening of the assessment was deemed invalid as it was found to be based on a mere change of opinion without any new tangible material. Consequently, the additions made by the A.O. on account of undisclosed sales and unexplained purchases were not addressed separately. The revenue's appeal was dismissed, and the order was pronounced on 30th May 2018.

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Issues Involved:
1. Validity of the reopening of the assessment under section 143(3) / 147 of the Income Tax Act, 1961.
2. Legality of the additions made by the Assessing Officer (A.O.) on account of undisclosed sales and unexplained purchases.

Detailed Analysis:

Issue 1: Validity of the Reopening of the Assessment
The primary issue in this case is the validity of the reopening of the assessment by the A.O. under sections 143(3) / 147 of the Income Tax Act, 1961. The original assessment was completed under section 143(3) on 20.12.2007, determining the total income of the assessee at Rs. 87,950/-, which was later rectified to Rs. 82,950/- under section 154. The A.O. reopened the assessment on noticing discrepancies in the sales figures, issuing a notice under section 148 on 08.10.2010. The assessee filed a return declaring the same income as originally filed.

The assessee challenged the reopening, arguing that it was based on a mere change of opinion without any fresh tangible material. The Ld. CIT(A) annulled the assessment, citing various judicial precedents, including the Supreme Court's decision in CIT vs Tarajan Tea Co. (P) Ltd. and ITO vs Nawab Mir Barkat Ali Khan Bahadur, which established that reopening based on the same information available during the original assessment is not permissible.

The Tribunal upheld the Ld. CIT(A)'s decision, emphasizing that the reopening was based on the same set of facts and materials available during the original assessment. The Tribunal referenced the full bench decision of the Hon’ble Delhi High Court in CIT vs Kelvinator of India Ltd., which held that reopening based on a mere change of opinion is not permissible. The Tribunal concluded that the reopening was bad in law and upheld the Ld. CIT(A)'s order annulling the assessment.

Issue 2: Legality of the Additions Made by the A.O.
Given the decision on the preliminary issue, the Ld. CIT(A) did not adjudicate on the merits of the additions made by the A.O. The additions included Rs. 58,25,540/- on account of undisclosed sales and Rs. 7,07,373/- on account of unexplained purchases. Since the reopening itself was held invalid, the Tribunal did not need to address these additions separately.

Conclusion
The Tribunal dismissed the revenue's appeal, upholding the Ld. CIT(A)'s order that annulled the assessment made by the A.O. under section 143(3) / 147. The reopening of the assessment was deemed invalid as it was based on a mere change of opinion without any new tangible material. Consequently, the additions made by the A.O. were not adjudicated upon. The appeal of the revenue was dismissed, and the order was pronounced in the open court on 30th May 2018.

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