Chaini Parwani –
Published On: October 29, 2021 at 09:50 IST
The Orissa High Court observed that the Reassessment Proceedings cannot be initiated on mere “Change of Opinion.”
The Division Bench headed by the Chief Justice, S.Muralidhar, and Justice B.P.Routray observed that the reasons for reopening the Assessment do not suggest any new material that was accessible with the Department.
Further the Bench highlighted that the accounts produced by the Assessee were re-examined and a new opinion was arrived at by the Opposite Party No.1 regarding the claim of the deduction of Rs.48,183/- on account of the loss of sale of assets which was already disclosed earlier by the Assessee.
Furthermore, the Bench highlighted that a questionnaire had been issued by the Assessing Officer (AO) in the course of the Original Assessment Proceedings to which the Assessee responded mindfully.
The Bench then concluded and stated the Reason to Believe of the Opposite Party that Income for the Assessment Year in question had escaped assessment is based on a mere ‘Change of opinion’.
The Petitioner has impugned a Notice on 16th September 2013 issued by the Deputy Commissioner of Income Tax, Berhampur Circle, Berhampur under Section 148 of the Income Tax Act, 1961 claiming to reopen the Assessment of the Petitioner for the Assessment Year 2009-10.
The Petitioner, Jagannath Promoters is a Partnership Firm who filed its Income Tax Return for the Assessment Year (AY) on 16th November 2009 revealing a Total Income of Rs. 15,30,110/-and the Tax return was picked up for Scrutiny.
In response to the notices under Sections 142(1) and 143(2) of the Income Tax Act, the Petitioner appeared before the Assistant Commissioner, AO Berhampur Circle, Berhampur, and presented Books of Account including Cash Book Ledger, Audit Report, Balance Sheet, and Profit and Loss (P & L) Account.
The AO after examining the documents, issued on 19th October 2011 a detailed questionnaire to the Assessee and the Assessee responded to the same.
Further on 5th December 2011, the Assessing Officer issued the Assessment Order under Section 143 (3) of the Act determining the Section 143(3) of total Taxable Income as Rs.18.43.708/-
Accordingly, the payable Tax was calculated as Rs.1,39,054/-.
In the Assessment Order, the Assessing Officer disallowed Income worth Rs.3,13,600/- on account of Sundry Creditors.