Reopening assessments under the Income Tax Act cannot be based solely on a change of opinion; substantial new evidence must be presented to justify such actions.

JUDGMENT :

RAJA BASU CHOWDHURY, J.

1. The petitioner is a limited liability company within the meaning of the Companies Act, 2013 and is an assessee within the meaning of Income Tax Act, 1961 (hereinafter referred to as the “said Act”). By the instant writ petition the petitioner seeks to challenge not only an order passed under Section 148A(3) of the said Act, dated 26th June, 2025 but also the notice issued under Section 148 of the said Act in respect of the assessment year 2021-22 on the specific ground that the same are based on change of opinion.

2. Mr. Mazumdar, learned senior advocate representing the petitioner, at the very outset, has drawn the attention of this Court to the notice issued under Section 148A(1) of the said Act dated 11th March, 2025 and would submit that such notice was based on information which had been uploaded in the Insight Portal of the Income Tax Department, wherefrom it has been deduced that the income chargeable to tax has escaped assessment in respect of the financial transactions made by the assessee to the tune of Rs. 383,56,66,066/- concerning a cash purchase of coal from Majee Group amounting to Rs. 2,45,00,000/- and the information uploaded in the taxpayer annual summary (TAS) report amounting to Rs. 381,11,66,066/-. Along with the above show-cause, the entire documents received from the investigation had been enclosed. Mr. Mazumdar has also drawn the attention of this Court to an information being F. No. ADIT (Inv.), Unit-2(4), Kolkata dated 24th February, 2022, addressed to the assessing officer of the petitioner. By identifying the transactions appearing at pages 107 and 108 of the writ petition, Mr. Mazumdar would submit that nine (9) several transactions for the relevant assessment year have been identified, and it has been alleged that the petitioner has made huge cash payments to Majee Group and that since, the petitioner is engaged in manufacturing of steel products and has a factory at Purulia, where, coal is an essential raw material, such coal had been purchased by the petitioner from Anup Majee Group. By comparing the above information with that of the notice issued under Section 142(1) of the said Act dated 15th November, 2022 for the relevant assessment year, it is submitted that when the said notice under Section 142(1) of the said Act was issued, the above information was obviously within the notice of the assessing officer. Notwithstanding the above and despite noting the aforesaid transactions as would corroborate from the observations made in the said notice, under the head “verification of transactions”, the petitioner was called upon to explain the noted nine several transactions and the cash payments made to the said Majee Group.

3. Records would reveal that the petitioner had responded to the above notice by a communication in writing dated 28th November, 2022 and in paragraph 7 thereof, had claimed that it had never entered into any alleged cash transactions and therefore, the allegation was unfounded. By placing before this Court the assessment order issued under Section 143(3) of the said Act, for the relevant assessment year dated 22nd December, 2022, it is submitted that the aforesaid issue was not only scrutinised before the assessing officer, the assessing officer chose to drop the same. According to Mr. Mazumdar, once, an issue is dropped and an assessment order is passed, jurisdictional assessing officer is no longer competent to review his opinion and pass a fresh order so as to re-open the proceedings by issuing a notice under Section 148 of the said Act, which has already been closed. According to Mr. Mazumdar, the petitioner upon receipt of the notice issued under Section 148A(1) of the said Act for the assessment year 2021-22 dated 11th March, 2025, had duly responded to the same by a communication dated 20th March, 2025. He would submit that while reiterating his earlier stand that although, the assessment proceedings were concluded and the assessment or