Non-consideration of certain information during original assessment is valid ground to reopen assessment: HC

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Non-consideration of certain information during original assessment is valid ground to reopen assessment: HC

Cognizant Technology Solutions India (P.) Ltd.
[2021] 129 taxmann.com 327 (Madras)
Short Overview of the case:
Where reasons recorded by Assessing Officer for reopening assessment would reveal that certain relevant information and materials were not considered by Assessing Officer which would have to be taken into consideration while passing assessment order and relying on certain intricacies in accounting, he has reason to believe that income chargeable to tax escaped assessment and initiated section 147 proceedings, revenue have established reasons to believe for reopening of assessment, which is a pre-condition contemplated under section 147.
  • If Assessing Officer has reason to believe that the particular issue has not been considered or scrutinized during the course of original assessment proceedings, then he is empowered to reopen the assessment under section 147/148.
 Thus, section 147 provides an opportunity to the revenue to reopen the proceedings if the revenue is able to trace out new information or materials within or from any other source for the purpose of reopening.
If only the very same materials certain issues were not considered and such non-consideration resulted in escapement, then also reopening is permissible.
  • If from and out of the same issue and on the same material, the Assessing Authority identified some under-assessment or the other reasons as contemplated under section 147, then reopening is permissible.
Therefore, materials may be one and the same, issue may be one and the same and in respect of final conclusion, if there was non-consideration which resulted escapement in the original assessment order and the Assessing Authority found that there was an under-assessment, which resulted in loss of revenue, then also reopening of assessment is certainly possible.
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