2023 (9) TMI 758 - BOMBAY HIGH COURT

Reopening of assessment u/s 147 - reasons to believe - no information furnished by the Petitioner including relating to his immovable property - HELD THAT:- From the facts in the present case, it is evident that the AO had within his possession all the primary facts and it was for him to make necessary enquiry and draw proper inferences. Thus, the AO did not do and it is even admitted by the Respondents that the AO failed to appreciate the information provided by the Petitioner by ‘oversight’.

Thus, it cannot be said that the income chargeable to tax for the AY under consideration has escaped assessment by reason of the omission or failure on the part of the Petitioner to disclose fully and truly all material facts. The AO had all the material before him when he made the original assessment.

Whether assessment cannot be reopened on a mere change of opinion and more particularly, in the absence of any fresh tangible material ? - The first assessment order is based upon the information and details provided by the Petitioner including material relating to his immovable property and the deductions under Section 54(F) of the Act have been computed on the basis of the material provided by the Petitioner. Thus, the AO had in his possession all the primary facts and it was for him to make necessary inquiries and draw proper inference as to whether deductions as claimed under Section 54(F) of the Act were to be allowed or otherwise while working the computations.

Thus, it can be safely held that the reopening of the assessment order is clearly on the basis of a change of opinion and that too without surfacing of any tangible new information.

As noted earlier, a perusal of the communications reveal that there was nothing more to disclose and a person cannot be said to have omitted or failed to disclose information which clearly has been placed before the AO at the time of issuance of the first assessment order.

It is settled law that the reasons for reopening an assessment can be tested and examined only on the basis of the reasons recorded at the time of issuing the notice under Section 148 of the Act. The Revenue has not even placed on record any document to suggest that the reasons recorded have been furnished to the Petitioner. On this ground alone the assessment order impugned herein deserves to be quashed.

Petitioner had fully and truly disclosed all material facts necessary for the purpose of assessment. The AO issued the first assessment order after carefully scrutinizing the material furnished by the Petitioner. The Respondents have failed to furnish any reasons for reopening as mandated by law. There is not even a whisper in the entire communication trail as to what was not disclosed. In our view, thus, this is not a case where assessment should be permitted to be reopened on the reasonable belief that income has escaped assessment on account of failure of the assessee to disclose truly and fully or material information necessary for computation of income. Decided in favour of assessee.