2021 (4) TMI 1211 - HC - Income Tax

Court upholds reopening of assessment for 2012-2013 due to unsubstantiated claims. Assessee must accurately compute income.

M/s. Home Finder Housing Limited Versus Income Tax Officer, Corporate Ward 2 (3), Chennai

M/s. Home Finder Housing Limited Versus Income Tax Officer, Corporate Ward 2 (3), Chennai - TMI Issues:Reopening of assessment for Assessment Year 2012-2013 based on reduction in inventory value claimed by the assessee.Analysis:1. The respondent Income Tax Officer sought to reopen the assessment for the Assessment Year 2012-2013 due to an alleged erroneous reduction in the value of inventory claimed by the assessee. The original assessment order was passed on 23.03.2015, and the notice for reopening was issued on 20.11.2019 within the normal limitation period under Section 147 of the Income Tax Act.2. The petitioner objected to the reopening of the assessment, leading to the Income Tax Officer passing an Assessment Order on 13.12.2016 under Section 143(3) read with Sections 147 and 148 of the Income Tax Act.3. The petitioner challenged the assessment in a writ petition, which was partly allowed, directing the respondent to pass a speaking order in line with a Supreme Court decision. The Division Bench upheld the order, leading to the impugned speaking order being passed.4. The petitioner contended that there was no valid reason for reopening the assessment, as it was based on a change of opinion without any new information coming to light.5. The petitioner referenced various court decisions to support their argument against the reopening of the assessment.6. The respondent defended the reopening, citing a tripartite agreement from 2012 that was not disclosed to the Assessing Officer during the original assessment.7. The court considered arguments from both sides, reviewed the impugned notices and orders, and noted that the assessment order passed earlier lacked a speaking order.8. The court found that the reasons for reopening the assessment were valid, as the petitioner had not substantiated the reduction in inventory value during the original assessment.9. The court emphasized that it is the assessee's responsibility to correctly compute income for tax purposes, and the assessing officer has the right to reopen assessments for irregular claims.10. Ultimately, the court dismissed the writ petition but allowed the petitioner to participate in further proceedings before the respondent, directing the respondent to pass a fresh assessment order within 90 days.11. The court instructed the respondent to make decisions on merit without being influenced by the court's observations, and the writ petition was dismissed with no costs.This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive summary of the arguments presented by both parties and the court's final decision and directives.