Court rules Assessing Officer's restriction on deduction impermissible, invalid notice for reopening assessment, petitioner not at fault.

The court found in favor of the petitioner, ruling that the Assessing Officer's decision to restrict the deduction claimed under Section 80-IC of the Income Tax Act to 30% was an impermissible change of opinion. Additionally, the court held that the notice issued under Section 148 for reopening the assessment was invalid as it was based on insufficient reasons and a judgment that had been overruled. The court determined that there was no failure to disclose material facts by the petitioner, ultimately quashing the notice and order for reopening the assessment.

---

---

Issues:
1. Claim for 100% deduction under Section 80-IC of the Income Tax Act for two manufacturing units.
2. Validity of the notice issued under Section 148 of the Act for reopening the assessment.
3. Allegation of failure to disclose material facts leading to escapement of income.

Analysis:
1. The petitioner claimed 100% deduction for profits from two manufacturing units under Section 80-IC of the Income Tax Act. The Assessing Officer contended that the deduction should have been 30% and reopened the assessment. The court found that the Assessing Officer's opinion for restricting the deduction to 30% was a clear case of impermissible change of opinion to reopen the assessment.

2. The notice issued under Section 148 of the Act alleged escapement of income for the Assessment Year 2014-2015. The petitioner argued that the reasons provided for reopening indicated a change of opinion, which is not allowed after the completion of the assessment under Section 143(3) of the Act. The court agreed with the petitioner, stating that there was no failure to disclose material facts, and the reasons for reopening were insufficient and based on an overruled judgment.

3. The court noted that the Assessing Officer's reliance on a judgment that had been overruled and the allegation of failure to disclose material facts were unsubstantiated. The petitioner had explained the deductions claimed under Section 80-IC during the assessment proceedings, and the Assessing Officer had actively considered the issue. Queries were raised, and the petitioner provided explanations, indicating no failure to disclose material facts. The court concluded that the petition was justified, quashing the notice and order issued for reopening the assessment.

This detailed analysis highlights the court's findings regarding the deduction claim, validity of the notice for reopening, and the alleged failure to disclose material facts, providing a comprehensive overview of the judgment delivered by the Bombay High Court.

---