High Court rules against revenue in reassessment case, finding lack of grounds for reopening assessments.

The High Court upheld the decision that the assessing officer did not have sufficient grounds to reopen assessments for the years 2009-10 and 2012-13 due to lack of concrete evidence or material connecting the assessee to alleged wrongdoing. The Court found that the reassessment was without jurisdiction and based on a change of opinion rather than new material. The appeal by the revenue was dismissed, affirming the Tribunal's findings of invalidity in reopening assessments for both years, leading to the closure of the stay application.

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Issues:
1. Validity of reopening assessment for assessment years 2009-10 and 2012-13.
2. Merits of the matter regarding the alleged false losses in commodity trading.

Validity of Reopening Assessment (2009-10):
The High Court considered the issue of the validity of reopening the assessment for the assessment year 2009-10. The Tribunal found that the assessing officer did not have the necessary foundation based on information to believe that income had escaped assessment before issuing the notice for reopening. The appraisal report, which formed the basis for the reopening, was received after the notice was issued. The Court upheld the contention that the AO did not comply with the legal requirement before reopening the assessment, rendering the order passed by the AO without jurisdiction. Consequently, the Court allowed the cross objections taken by the assessee for the assessment year 2009-10.

Validity of Reopening Assessment (2012-13):
For the assessment year 2012-13, the Tribunal examined whether there was tangible evidence or material available to justify the reopening of the assessment. The Court noted that the appraisal report did not provide concrete evidence but rather triggered a reason to suspect. The AO failed to connect the assessee to the alleged wrongdoing as suggested in the appraisal report. The Court held that the initiation of reassessment suffered from legal infirmity as there was no tangible material to believe that income had escaped assessment. The AO's action to reopen was considered based on a change of opinion without any material change in the underlying facts known at the time of the regular assessment.

Conclusion:
The High Court dismissed the appeal filed by the revenue, as there was no substantial question of law arising for consideration. The Court affirmed the findings of the Tribunal regarding the invalidity of reopening assessments for both the assessment years 2009-10 and 2012-13. Consequently, the application for stay was also closed.

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