Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (4) TMI 859 - ITAT CHENNAIReopening of assessment u/s 147 - Proof of fresh tangible material - whether reopening of assessment is based on reasonable belief of escapement, which suggest escapement of income on the basis of fresh tangible material or mere change of opinion on the issue which has been deliberated upon by the AO during the scrutiny assessment proceedings? - HELD THAT:- The facts born out from records clearly indicate that the Assessing Officer has examined issue of compensation paid by the assessee for breach of contract with his employer company and has allowed claim which is evident from fact that the Assessing Officer has left a note ‘not to the assessee’ in the assessment records as per which, it is clearly evident that the Assessing Officer has applied his mind before allowing claim of the assessee. Reasons recorded by the Assessing Officer to form reasonable belief of escapement is based on audit objection, as per which the audit party also noted that as per note ‘not to the assessee’ from assessment records, the audit party has raised objection on the issue of deduction allowed towards expenses claimed by the assessee. Basis for reopening of assessment is audit objection and further, which is based on note ‘not to the assessee’ given on assessment records. Except this, there is no fresh tangible material in the possession of the Assessing Officer to form reasonable basis of escapement of income - once it is noted that basis for reopening of assessment is note ‘not to the assessee’ available on record, then it is implied that the Assessing Officer had very clearly and definitely formed opinion on the issue and thus, reopening of assessment on the very same issue amounts to change of opinion, which is not permissible under the law. Since, there is no fresh tangible material, except note ‘not to the assessee’, with the Assessing Officer to form reasonable belief of the escapement, we are of the considered view that the AO had applied his mind to the issue in the original assessment proceedings and has allowed deduction. Therefore, reopening of assessment on the very same issue in absence of any fresh tangible material amounts to clear case of change of opinion, which is not permissible under the law. CIT(A), after considering relevant facts has rightly quashed the assessment proceedings. Hence, we are inclined to uphold findings of the learned CIT(A) and reject grounds taken by the revenue.
|