Tax authorities may validly reopen previously concluded assessments if there is credible information suggesting income has escaped assessment, provided the action complies with statutory limitation periods after accounting for mandated procedural exclusions in the computation of such time.

ORDER :

C.SARAVANAN, J.

In this writ petition, the petitioner has challenged the impugned Order dated 02.05.2022 passed under Section 148A(d) and the impugned Notice dated 02.05.2022 issued Section 148 of the Income Tax Act, 1961.

2. The respondent has reopened the assessment for the Assessment Year 2015-16, pursuant to Section 148A(b) Notice dated 31.03.2022.

3. The Operative portion of the impugned Order dated 02.05.2022 reads as follows:

“4. The assessee's contention was considered carefully and disposed of as under;

4.1 LIMITATION

4.1.1 This case has been selected / flagged in the Insight Portal of the Department in accordance with the Risk Management Strategy formulated by the CBDT under clause (i) to explanation (1) to section 148 of the Income-tax Act 1961.

4.1.2 This case falls under section 149(1)(b) of the IT Act, 1961 as information which suggests that the income chargeable to tax, represented in the form as asset has escaped assessment amounts to or likely to amount to fifty lakhs or more for that yearis available with the Assessing officer. In the instant case the fees of Rs.2,85,26,271/- taken in advance is in the form of asset.

4.2 CONCEPT OF ASSET

4.2.1 As per Section 149(1)(b) along with Explanation (1) of the IT Act, 1961:

'No notice under section 148 shall be issued for the relevant assessment year,-

(b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of accounts or other documents or evidence which reveal that the income chargeable to tax, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year:

Explanation- For the purposes of clause (b) of this sub-section, asset shall include immovable property, being land or building or both, shares and securities, loans and advances, deposits in bank account.'

4.2.2 Thus, the amount that escaped assessment is receipt of fees in advance, which has not been included as income for the relevant Asst Year of 2015-16. Hence the objection raised by the assessee that it is not the case of the revenue to reopen the case as income chargeable to tax represented in the form of asset is not available cannot be accepted.

4.3 CHANGES IN THE FINANCE BILL

4.3.1 It may be noted here that the notice u/s 148A(b) was issued on 31.03.2022 in conformity with the provisions of the Finance Bill 2021 as on 01.04.2021 and not the bill introduced on 01.04.2022.

The provisions introduced in the Finance Act 2022 would be applicable only to the cases that are to be reopened after 01.04.2022 and not the ones reopened before that date.

4.4 NOTICE ISSUED ON AN ADJUDICATED ISSUE

4.4.1 It is stated that the new provisions of section 148 has been introduced w.e.f 01.04.2021 which has done away with the concept of change of opinion. The Assessing officer cannot act on his own regarding reopening of assessments as what constitutes information available with the Assessing officer is clearly defined in the section 148 itself i.e. 1) Information flagged in the case of the assessee for the relevant A.Y in accordance with the risk management strategy formulated by the Board from time to time and 2) any final objection raised by the CAG of India to the effect that the assessment in the case of the assessee for the relevant A.Y has not been made in accordance with the provision of the act.

It is informed that several categories of information obtained as per the Risk Management Strategy formu