Mumbai ITAT: mere change of opinion by the AO cannot be ground for reassessment

 

Issue: Issue examined under original assessment proceeding: Whether re-opening in such case is justified

The Tribunal noted that it was well settled that mere fresh application of mind to the same set of facts or mere change of opinion does not confer jurisdiction even under the post-1989 section 147. The consistent view is that even after amendment of section 147 (w.e.f. 01.04.1989) mere change of opinion does not confer jurisdiction on the Assessing Officer to initiate proceedings for re-assessment merely by resorting to Explanation 1 to that section on the basis of change of opinion. Where, on the same material, the succeeding officer wants to take a different view than taken by the predecessor Assessing Officer and wants to take action u/s 147, such action cannot be sustained because the view taken by the subsequent officer is nothing but a change of opinion. The Tribunal relied on the decision of Hon’ble Supreme Court CIT v. Kelvinator of India Ltd. wherein it was held that If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned. Seeing that the assessee in the instant case disclosed all the primary facts necessary for assessment of its case to the Assessing Officer, a mere change of opinion by the AO in the instant case cannot be a ground for reassessment. Issue Outcome: Assessee