The Assessing Officer cannot reopen an assessment based solely on previously considered material, as this constitutes a mere change of opinion, which is impermissible under the Income Tax Act.

JUDGMENT :

D.N. RAY, J.

1. Heard learned advocate Mr. B.S. Soparkar for the petitioner and learned advocate Senior Standing Counsel Mr. Karan Sanghani for the respondent.

2. Having regard to the controversy involved which is in a narrow compass, with the consent of the learned advocates for the respective parties, the matter is taken up for hearing.

3. Rule returnable forthwith. Learned advocate Senior Standing Counsel Mr. Karan Sanghani waives service of notice of rule on behalf of the respondent.

4. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the jurisdiction of the respondent Assessing Officer to issue notice dated 31.03.2021 under section 148 of the Income Tax Act, 1961 (For short “the Act”) for Assessment Year 2017-2018.

5. Brief facts of the case are that the petitioner filed its original return of income for Assessment Year 2017-2018 on 25.10.2017 declaring total income of Rs.80,14,73,480/-.

6. Pursuant to return of income being processed, notice under section 142(1) of the Act was issued upon the petitioner on 19.06.2019 seeking information.

7. The petitioner filed a detailed reply dated 29.08.2019 to the aforesaid notice.

8. The Assessing Officer passed the assessment order under section 143(3) of the Act dated 22.11.2019 wherein no addition was made on the issue of tax deducted at source and cash deposits.

9. Thereafter, notice under section 148 of the Act dated 31.03.2021 was issued upon the petitioner directing the petitioner to furnish the return of income for Assessment Year 2017-2018.

10. The petitioner accordingly filed its return of income in compliance of notice under section 148 on 24.04.2021 and sought for reasons recorded for reopening.

11. Accordingly, the copy of reasons recorded for reopening the assessment were supplied to the petitioner on 27.05.2021. Such reasons recorded read as under:

“2. (A) On perusal of assessment records, it is seen from the information furnished by the auditor in column 34(a) of form 3CD that the assessee has failed to deduct TDS/Deducted less TDS than specified rated on payments of Rs. 10,37,748/- As per the provisions of section 40(a)(ia) of the Act, 30% of such amount which comes to Rs. 3,11,324/- should not be allowed as deduction is to be added to the total income of the assessee. By not doing so resulted in underassessment of income of Rs. 3,11,324/-. Thus, there is underassessment of income of Rs. 3,11,324/-.

(B) During the year under consideration, the assessee has deposited huge cash deposit and the assessee has not furnished any supporting documents i.e. details of Cash book, Bank Book, unsecured loan, deposit in form of fixed deposits etc during the assessment proceedings, verification to ascertain the source of such cash deposit with respect to their identity, genuineness and creditworthiness and has not satisfactorily proved the genuineness f the deposits by its branch Offices.”

12. The petitioner thereafter filed preliminary objections on 07.06.2021 challenging the validity of the notice issued under section 148 of the Act. It is the case of the petitioner that no order disposing off the objections was received by the petitioner till the time of filing of the petition.

13. It is the case of the petitioner that thereafter notice under section 142(1) of the Act was issued by the respondent no. 2 asking the petitioner to supply the details in relation to the reassessment proceedings without disposing off the objections by way of speaking order.

14. The petitioner therefore, by letter dated 18.01.2022 requested the respondent no. 2 to first dispose off the objections.

15. Being aggrieved by the impugned notice, the petitioner has preferred the present petition challenging the impugned notice.

16. Learned advocate Mr. B.S. Soparkar for the petitioner submitted that the respondent Assessing Officer could not have assumed jurisdiction to reopen the assessment for the Assessment Year 2017-2018 as he has perused the same material which was