AO cannot reopen a case to re-examine issue examined during original assessment
IN THE INCOME TAX APPELLATE TRIBUNAL
The Relevant Text of the Order as follows :
18. We find that ld CIT(A) has followed the decision of Hon’ble Supreme Court in the case of CIT vs Kelvinator of India ltd., 320 ITR 561 (SC), wherein, it was held that the concept of change of opinion must be treated as an inbuilt test to check the abuse of power by the AO and that even after 1.4.1989, the date from which the amended provisions of section 147 came into force, the AO has power to reopen an assessment, provided there is tangible material to come to the conclusion that there is escapement of income from assessment. However, in this case, no tangible material has come to the knowledge of the AO to reopen the assessment. Ld CIT(A) has also followed the decisions of this Tribunal in assessee’s own case under similar facts in quashing the reassessment order.
19. Further, in the reasons recorded for reopening of assessment, there is no whisper, what to speak of any allegation, that the assessee had failed to disclose fully and truly all material facts necessary for assessment and that because of this failure there has been an escapement of income chargeable to tax. Merely having a reason to believe that income had escaped assessment, is not sufficient to reopen the assessment. The escapement of income from assessment must also be occasioned by the failure on the part of the assessee to disclose material facts, fully and truly. This is a necessary condition for overcoming the bar set up by the proviso to section 147. If this condition is not satisfied, the bar would operate and no action under section 147 could be taken.
20. Considering the facts and circumstances of the case, we are of the opinion that there is nothing to suggest that all the primary facts were not disclosed by the assessee at the time of original assessment completed u/s 143(3) of the Act nor any failure on the part of the assessee to disclose fully and truly all the material facts has been ascribed in the circumstances narrated before us. It cannot be said that the assessee suppressed any material facts. Thus, we are of the considered opinion that the ld CIT (A), in the operative para (supra) 2.2 was right in holding that, from the assessment order, it is found that the AO, after considering the reply/explanation of the assessee has made disallowance of Rs.194.85 crores which does not include the expenses incurred in foreign currency under the head “ others” and passed assessment order dated 30.12.2016 u/s.143(3) of the Act Thereafter, there was no new tangible materials, as discernible from the reasons recorded by him for initiation of reassessment proceedings in his hands, thus, it is a case of change of opinion. It is wellsettled that if a notice under section 148 of the Act has been issued without the jurisdictional foundation u/s 147 of the Act new tangible materials which was not with him during original proceedings being available to the AO, the notice and the subsequent proceedings will be without jurisdiction and thus, liable to struck down. In view thereof, we have no hesitation in confirming the findings of the ld. CIT(A) in quashing the reassessment order.
21. In the result, appeal of the revenue is dismissed.
Order pronounced on 09/09/2020.