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of <h1>Invalid Notice Reopening Assessment Year 2012-13: High Court rules against impermissible change of opinion</h1> <h3>Maharashtra State Power Generation Company Ltd., Versus Deputy Commissioner of Income-Tax, Circle -14 (2) (1), Mumbai & 2 Ors.</h3> Maharashtra State Power Generation Company Ltd., Versus Deputy Commissioner of Income-Tax, Circle -14 (2) (1), Mumbai & 2 Ors. - TMI Issues:1. Validity of notice dated 30th March, 2019 under section 148 of the Income Tax Act, 1961 for reopening the assessment for the assessment year 2012-13.2. Whether failure to disclose material facts justifies the reopening of assessment.3. Legality of reopening assessment based on audit objections.Issue 1: Validity of Notice for Reopening Assessment:The petitioner filed its return of income for the assessment year 2012-13, declaring a loss. The assessment was completed under section 143(3) of the Act, determining the total income loss. However, a notice under section 148 was issued more than four years after the end of the relevant assessment year. The court noted that the reasons for reopening assessment indicated a change of opinion by the Assessing Officer, which is impermissible. The court held that the Assessing Officer cannot reopen the assessment based on the same material to take another view, as conclusively taken in the previous assessment order.Issue 2: Failure to Disclose Material Facts:The court analyzed the reasons recorded for reopening the assessment and found that the assertion of failure to disclose material facts was an attempt to circumvent the restrictions imposed by the proviso to section 147 of the Act. The court held that it was a clear case of change of opinion, which is not permissible as established by various court precedents. The Assessing Officer had already taken a conclusive view in the previous assessment order, making it impermissible to reopen the assessment based on the same material.Issue 3: Reopening Assessment Based on Audit Objections:The petitioner's objections to the reopening of assessment were based on audit objections raised by the revenue audit cell. The court cited legal precedents to establish that reassessment proceedings initiated solely on the basis of audit objections are illegal and not valid in law. The court referred to past judgments highlighting that reopening assessments based on audit objections without independent application of mind by the Assessing Officer are impermissible. In this case, the court found that the reopening of the assessment at the behest of the audit party was misconceived, incorrect, and bad in law, leading to the allowance of the petition.In conclusion, the High Court of Bombay held that the notice for reopening the assessment for the assessment year 2012-13 was invalid due to a change of opinion by the Assessing Officer, failure to disclose material facts, and the reliance on audit objections without independent application of mind. The court allowed the petition in favor of the petitioner, quashing the impugned notice and rejecting the objections raised by the respondents.
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