AO cannot reopen assessment under Section 147 after four years based on mere change of opinion without fresh material

ITAT Raipur ruled in favor of the assessee, holding that the AO wrongly reopened assessment under Section 147 after four years based on mere change of opinion. The tribunal found that the original AO had already deliberated on the assessee's Section 80IA deduction claim and depreciation matters during the original assessment under Section 143(3). No fresh material or information justified reopening the concluded assessment. The assessee had fully disclosed all material facts, making the case ineligible for extended limitation period under first proviso to Section 147. The reopening was struck down as impermissible.

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Issues Involved:
1. Validity of reassessment under \u/s 148/143(3) of the Income Tax Act, 1961.
2. Disallowance of deduction claimed under \u/s 80IA.
3. Disallowance of depreciation claimed on bio gas plant.
4. Whether reassessment was based on a mere change of opinion.

Summary:

Issue 1: Validity of Reassessment under \u/s 148/143(3)
The Tribunal examined whether the reassessment was validly initiated. The original assessment for A.Y. 2010-11 was completed on 17.04.2012, and the reassessment notice was issued on 31.03.2016, beyond the four-year limit. The CIT(A) quashed the reassessment, noting that the AO did not establish any failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. The Tribunal upheld this decision, emphasizing that the reassessment was based on a mere reappreciation of facts already available during the original assessment, which constitutes a change of opinion and is not permissible under the law.

Issue 2: Disallowance of Deduction Claimed under \u/s 80IA
The AO disallowed the deduction claimed under \u/s 80IA for carbon credit income, arguing it was ancillary and not directly derived from power generation. The CIT(A) found that the AO had already examined this issue during the original assessment and had accepted the claim. The Tribunal agreed, noting that the reassessment was based on a change of opinion without any new material, thus invalidating the reassessment.

Issue 3: Disallowance of Depreciation Claimed on Bio Gas Plant
The AO also disallowed depreciation on the bio gas plant, arguing that no plant and machinery were required to earn carbon credit. The CIT(A) observed that the AO had previously examined and accepted the depreciation claim during the original assessment. The Tribunal concurred, stating that the reassessment on this ground was also based on a change of opinion.

Issue 4: Reassessment Based on Mere Change of Opinion
The Tribunal reiterated that reassessment based on a mere change of opinion is not permissible. It cited several judicial pronouncements, including the Supreme Court's decision in CIT vs. Kelvinator of India Ltd., to support its conclusion. The Tribunal found that the AO's reasons for reopening the assessment were based on reappreciating existing facts rather than any new information, thus constituting a change of opinion.

Conclusion:
The Tribunal dismissed the revenue's appeals for both A.Y. 2010-11 and A.Y. 2012-13, upholding the CIT(A)'s orders quashing the reassessments for lack of valid jurisdiction and for being based on a mere change of opinion.

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