TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: Whether reassessment proceedings initiated under Section 147 of the Income-tax Act, 1961, pursuant to notice under Section 148 of the Income-tax Act, 1961, were valid when the original scrutiny assessment under Section 143(3) of the Income-tax Act, 1961 had considered the same expenditure claim and the reopening was founded on an audit objection.
Analysis: Reassessment under Section 147 requires the Assessing Officer to have reason to believe that income chargeable to tax has escaped assessment. That belief must be supported by tangible material and cannot rest on a mere change of opinion. Where the assessee had furnished details in the original scrutiny proceedings and the issue was examined, even if the assessment order did not discuss the point at length, it may still be inferred that the Assessing Officer formed an opinion. The material on record showed that the reassessment was triggered by an audit objection and the recorded reasons substantially repeated that objection, while the Assessing Officer had earlier disagreed with the audit view. In those circumstances, there was no independent application of mind and no live link between the material and the belief of escapement. The Court also noted the need for consistency where the same claim had been accepted in earlier and later years on the same factual matrix.
Conclusion: The reopening was invalid, as it was based on a change of opinion and not on independent reason to believe supported by tangible material. The challenge succeeded in favour of the assessee.
Ratio Decidendi: A reassessment initiated under Section 147 of the Income-tax Act, 1961 is invalid where the Assessing Officer lacks independent tangible material and seeks to reopen a matter already examined in scrutiny assessment merely on an audit objection or a change of opinion.
TaxTMI 
