Appeal allowed: Reopening under section 147 invalidated as mere change of opinion, not nondisclosure or new material

HC allowed the appeal and quashed proceedings under section 147, holding that the reopening was based on a mere change of opinion rather than any failure to truly and fully disclose material facts or new tangible material showing escaped income. The AO had considered submissions, accepted carried-forward losses, and losses arising on amalgamation retained their extended life; therefore the reassessment attempt impermissibly reviewed the original order. Decision in favour of the assessee.

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Issues Involved:
The issues involved in the judgment are the validity of the notice issued under section 148 of the Income Tax Act for Assessment Year 2014-15 and the disposal of objections raised for reassessment.

Summary of Judgment:

Issue 1: Validity of Notice under Section 148:
The notice dated 30th March 2021 issued under section 148 of the Income Tax Act for Assessment Year 2014-15 was challenged in the petition. The proviso to section 147 of the Act applies in this case, requiring the Respondents to demonstrate a failure to disclose material facts as per the decision in Ananta Landmark (P) Ltd. v DCIT CC 5(3) Mumbai [2021] 131 taxmann.com 52. The reasons for the initiation of proceedings under section 147 were examined, and it was found that there was no failure to disclose any material fact.

Issue 2: Disposal of Objections for Reassessment:
The order dated 14th February 2022, which rejected the objections raised for reassessment, was also challenged. The Assessing Officer had considered all submissions and documents and accepted the loss to be carried forward. The Respondent relied on the judgment in Kalyanji Mavji & Co v CIT 102 ITR 287 (S.C) to support the reopening of the case. However, it was argued that this judgment did not apply as there was a change of opinion, not inadvertence or oversight. The Respondent contended that the losses claimed were not allowable under the Act, and the reopening proceedings were initiated within the ambit of the law. The Court held that there was no new tangible material to conclude that income had escaped assessment, and the reassessment was based on a change of opinion, which is impermissible.

Conclusion:
In conclusion, the Court quashed and set aside the notice dated 30th March 2021 and the order dated 14th February 2022 for Assessment Year 2014-15. Further action in this regard was prohibited, and the rule was made absolute with no costs awarded.

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