Reopening assessment under Section 147 after four years held invalid; reassessment and disposal order set aside in taxpayer's favor

HC held reopening under section 147 beyond four years invalid and allowed challenge. Court found no allegation or proof that the taxpayer failed to fully and truly disclose material facts, and the reasons for reassessment relied solely on existing case records without any new tangible material. The objection disposal order also failed. The reassessment notice and related order were set aside, decision rendered in favor of the taxpayer.

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Issues Involved:
The issues involved in the judgment are the challenge to the order dated 22.03.2021 issued under Sec. 148 of the Income Tax Act and the disposal of objections in the order dated 09.02.2022.

Challenge to Order dated 22.03.2021:
The petitioner filed returns of income for Assessment Year 2015-16, later offering a revised computation of income due to a mistake in the calculation of long term capital gain. The Assessing Officer assessed the income at Rs. 51,62,600/-. Subsequently, a notice under Sec. 148 of the Act was issued, and objections were filed and disposed of.

Arguments by Petitioner:
The petitioner's counsel argued that the reopening was beyond the permissible period and without new tangible material. Detailed replies were filed previously, and the notice amounted to a change of opinion, impermissible under the law.

Arguments by Revenue:
The Revenue contended that the petitioner failed to disclose fully and truly all material facts during the assessment proceedings, justifying the reopening. The failure to disclose necessary material facts led to the notice under Sec. 148 r/w. Sec. 147.

Judgment:
The Court analyzed the reasons recorded for reopening and found that the same material had been considered during the original assessment. Detailed replies were filed and accepted by the Assessing Officer, indicating a change of opinion in issuing the notice. As there was no new tangible material, the reopening was based on audit objections and failed to meet legal requirements.

Conclusion:
The Court quashed and set aside the impugned notice dated 22.03.2021 and the order dated 09.02.2022, allowing the petition and making the rule absolute.

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