Issue examined under original assessment proceeding: Whether re-opening in such case is justified
- The Assessee-company had filed its return of income for the relevant assessment year 2013-14 on 30.09.2013. Subsequently, the Assessee had filed a revised return on 26.11.2013. The assessment was selected for scrutiny under CASS and notice under section 143(2) of the Act dated 03.09.2014 was served and original assessment was completed by DCIT, Corporate Circle-6(2), Chennai vide his order dated 31.03.2016 under section 143(3) of the Act. Subsequently, a notice under section 148 was issued to the Assessee.
- Reliance was placed on the decision of the Hon’ble Supreme Court in the case of CIT vs. Kelvinator of India Ltd., wherein it was concluded that the conceptual difference between power to review and power to reassess should be kept in mind. The Assessing Officer has no power to review, he has the power to reassess. But reassessment has to be based on the fulfilment of certain pre-conditions and if the concept of ‘change of opinion’ is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, the review would take place. One must treat the concept of ‘change of opinion’ as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April 1989, the Assessing Officer has power to reopen, provided there is ‘tangible material’ to come to the conclusion that there is escapement of income from assessment.”
- Thus, it was inferred that the re-assessment proceedings were liable to be quashed as it was done merely on the basis of change of opinion.