2014 (5) TMI 19 - ALLAHABAD HIGH COURT

Validity of re-assessment u/s 147 r.w. section 148 of the Act – Sale of land - Failure to disclose material facts – Mere change of opinion – Bar of limitation - Held that:- The proceeding u/s 147 cannot be initiated on account of change of opinion - Change of opinion and review of the assessment is not permissible – Relying upon Commissioner of Income Tax, Delhi Versus M/s. Kelvinator of India Limited [2010 (1) TMI 11 - SUPREME COURT OF INDIA] - the duty of the assessee in any case does not extend beyond making a true and full disclosure of primary facts - Once he has done that his duty ends - It is for the Income-tax Officer to draw the correct inference from the primary facts - It is no responsibility of the assessee to advise the Income-tax Officer with regard to the inference which he should draw from the primary facts - If an Income-tax Officer draws an inference which appears subsequently to be erroneous, mere change of opinion with regard to that inference would not justify initiation of action for reopening assessment - under Section 147, the assessing authority has no power to review and the proceeding cannot be taken on account of change of opinion.

There is no failure on the part of the assessee to disclose fully and truly all material facts, in the assessment of the relevant assessment year, exception to proviso to Section 148 is not applicable - The limitation to take action is four years from the end of the relevant assessment year - The four years' period for the assessment year 2003-04 expired on 31st March, 2008, while notice u/s 148 has been issued on 8.7.2009, that is, after expiry of four years' period, which is barred by limitation – Relying upon Anil Radhakrishna Wani Vs. Income-tax Officer and others [2010 (3) TMI 316 - BOMBAY HIGH COURT] - when a regular order of assessment is passed u/s 143 (3) of the Act, a presumption could be raised that such an assessment order has been passed with due application of mind - the proviso to section 147 of the Act will be applicable – notice issued u/s 148 of the Act has been issued after expiry of four years from the end of the relevant assessment year – thus, the notice issued u/s 148 of the Act is barred by limitation and also invalid - The proceeding in pursuance of the notice is also invalid – Decided in favour of Assessee.