1979 (1) TMI 31 - HC - Income Tax

Summary

Issues involved: Reopening of assessment u/s 148 read with section 147(b) and entitlement to relief under section 15C of the Indian Income-tax Act, 1922.

Relevant details for each issue:

1. Reopening of assessment u/s 148 read with section 147(b):
- The original assessment for the year 1959-60 was reopened under section 148 of the Income Tax Act, 1961, specifically under section 147(b).
- The Income Tax Officer (ITO) initiated reassessment to withdraw the rebate granted under section 15C, claiming it was erroneously granted.
- The reassessment was challenged by the assessee, contending that the action was unwarranted and that there was no failure to disclose facts during the original assessment.
- The Tribunal held that the reassessment was merely a change of opinion by the ITO and not based on new information, citing precedents that assessments cannot be reopened solely on a change of opinion.
- The Tribunal concluded that the reassessment under section 147(b) was not justified, as it was based on a change of opinion rather than new information.

2. Entitlement to relief under section 15C:
- The company had initially claimed rebate under section 15C as a new industrial undertaking for the assessment year 1959-60, which was allowed subject to modifications.
- The ITO later sought to withdraw this rebate, alleging that the company had leased the factory building and boiler from another entity, disqualifying it from the relief under section 15C.
- The Tribunal disagreed with the ITO's interpretation, stating that leasing the premises did not constitute a transfer and thus did not disqualify the company from the relief under section 15C.
- The Tribunal's decision was based on the grounds that the reassessment was not justified and that the leasing arrangement did not amount to a transfer as per relevant legal precedents.

Conclusion:
The High Court held that the reassessment under section 147(b) was not justified as it was based on a mere change of opinion by the ITO and not on new information. Therefore, the questions were answered in favor of the assessee, and the Commissioner was directed to pay the costs of the reference to the assessee.