Facts of the Case

The appeal was filed by Bishnu Transport Company against the reassessment order passed by the Assessing Officer under Section 147 read with Section 143(3) of the Income-tax Act, 1961 for Assessment Year 2011-12. The original assessment had already been completed after scrutiny. Subsequently, the Assessing Officer issued notice under Section 148 seeking to reopen the completed assessment after expiry of four years from the end of the relevant assessment year.

The reassessment was initiated on the basis of information already available on record during the original assessment proceedings. No new tangible material was brought on record to justify reopening. The assessee challenged the validity of reopening on the ground that there was neither failure on its part to disclose fully and truly all material facts nor any fresh material to form a valid belief of escapement of income.

Issues Involved

Whether reassessment proceedings initiated beyond four years from the end of the relevant assessment year were valid in the absence of any failure on the part of the assessee to disclose fully and truly all material facts, and whether reopening based on the same material already examined during original assessment amounted to a mere change of opinion.

Petitioner’s (Assessee’s) Arguments

The assessee contended that all primary facts relevant to the assessment were duly disclosed during the original assessment proceedings and were examined by the Assessing Officer. It was argued that the reasons recorded for reopening did not allege any specific failure on the part of the assessee to disclose material facts.

The assessee further submitted that reopening was based purely on re-appreciation of the same material already on record, which amounted to a change of opinion and was impermissible in law, particularly when the reopening was sought beyond the statutory period of four years.

Respondent’s (Revenue’s) Arguments

The Revenue supported the reassessment order and argued that income had escaped assessment warranting action under Section 147. It was contended that the Assessing Officer had valid reasons to believe that income chargeable to tax had escaped assessment.

Court / Tribunal Order and Findings

The ITAT Ranchi examined the reasons recorded for reopening and noted that there was no allegation or material to suggest any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. The Tribunal observed that the original assessment was completed after due scrutiny and the issues sought to be reopened were already examined during the original proceedings.

The Tribunal held that when reassessment is initiated beyond four years, the statutory condition of failure to disclose material facts is mandatory and jurisdictional. In the absence of such failure, the Assessing Officer lacks jurisdiction to reopen the assessment.

The Tribunal further held that reopening based on the same material already considered amounts to a mere change of opinion, which is not permissible under the scheme of Section 147.

Important Clarification

The Tribunal clarified that reassessment proceedings beyond four years cannot be sustained merely on a different interpretation of the same facts already on record, and strict compliance with the proviso to Section 147 is mandatory to confer jurisdiction on the Assessing Officer.

Final Outcome

The Income Tax Appellate Tribunal, Ranchi Bench, allowed the appeal of the assessee, holding that the reassessment proceedings were invalid and without jurisdiction, and accordingly quashed the reassessment order passed under Section 147 read with Section 143(3).

Link to download the order -  https://www.mytaxexpert.co.in/uploads/1769079094_BISHNUTRANSPORTCOMPANYDHANBADVS.DCITACITCIRCLE1DHANBAD.pdf

 

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.