Validity of Reassessment if Grounds for reassessment is already examined by AO during original assessment proceedings

Validity of Reassessment if Grounds for reassessment is already examined by AO during original assessment proceedings

 547 total views

Where reasons to believe the escapement of income, recorded in reassessment notice, were already dealt by AO during original assessment proceedings through a specific query made in this respect, the reassessment being based on a mere change of opinion was unsustainable.

AO sent reassessment notice to assessee-company alleging escapement of income. Reasons for reassessment were for wrongly showing capital gain as business income and for disallowance under section 14A. Assessee contended that during original assessment both these grounds had already been dealt by AO through a specific query made in this respect. Held: During the original assessment, both the questions raised by AO in reassessment notice, were already examined by AO through a specific queries raised in this respect. Therefore, reassessment being based on mere change of opinion was invalid.

Case Law:

IN THE GUJARAT HIGH COURT

AKIL KURESHI & BIREN VAISHNAV, JJ.

Pr. CIT v. JP Infrastructure (P) Ltd.

Tax Appeal No. 398 of 2017

25 July, 2017

Appellant by: Mauna M. Bhatt, Advocate

Opponent by: Manish J. Shah, Caveator

ORDER

Akil Kureshi, J.

The Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal dated 18-11-2016 raising following question of our consideration :–

“Whether the Appellate Tribunal has erred in law and on facts in quashing the reopening of assessment?”

2. The issue pertains to the validity of reopening of assessment.

For the assessment year 2007-08 in case of the respondent-assessee, original scrutiny assessment was framed after which to reopen the assessment, the assessing officer issued a notice within four years from the end of the relevant assessment year.

In the reasons recorded, he had indicated two grounds. One was with respect to treating certain income as business income instead of capital gain. Second was with respect to disallowance under section 14A of the Act. The Tribunal, in the impugned judgment, noticed that during the original assessment, both these questions were examined by the assessing officer for which, specific queries were raised. That being the position, we see no error in the view of the Tribunal that reassessment would be based on mere change of opinion.

3. Tax Appeal is therefore, dismissed.


Read More:

[button color=”” size=”” type=”outlined” target=”” link=”https://thetaxtalk.com/income-tax/”]Income tax[/button] [button color=”” size=”” type=”outlined” target=”” link=”https://thetaxtalk.com/gst/”]GST[/button] [button color=”” size=”” type=”outlined” target=”” link=”https://thetaxtalk.com/discussion-on-tax-problem/”]Query[/button] [button color=”” size=”” type=”outlined” target=”” link=”https://thetaxtalk.com/category/income-tax/latest-update/it-judgement/”]Income Tax Judgement[/button]

Leave a Comment

Your email address will not be published.

the taxtalk

online portal for tax news, update, judgment, article, circular, income tax, gst, notification Simplifying the tax and tax laws is the main motto of the team tax talk, solving