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IN THE HIGH COURT OF ORISSA AT CUTTACK
S. Muralidhar, M.S.Raman, JJ.
Principal Commissioner of Income Tax 1 – Appellant
Versus
Industrial Promotion And Investment Corporation of Orissa Ltd – Respondent
ITA No. 15 of 2021
Decided On : 31-01-2023
Reassessment - Income Tax - The court upheld the ITAT's decision to overturn the reassessment order, citing the judgment of the Supreme Court in CIT v. Kelvinator of India Ltd. 320 ITR 561(SC), and emphasizing that the Assessing Officer cannot reopen the assessment merely on the basis of the same material.
Fact of the Case:
The Revenue challenged an order by the ITAT regarding the reassessment for the Assessment Year 2010-11, questioning the justification of overturning the reassessment order based on the judgment of the Supreme Court in CIT v. Kelvinator of India Ltd. 320 ITR 561(SC).
Finding of the Court:
The Court found that the ITAT was justified in following the Supreme Court judgment and rejecting the plea of the Revenue, as no new tangible material was unearthed to justify the reopening of the assessment.
Issues: The main issue was whether the ITAT was justified in overturning the reassessment order based on the judgment of the Supreme Court in CIT v. Kelvinator of India Ltd. 320 ITR 561(SC).
Ratio Decidendi: The court emphasized that the Assessing Officer cannot reopen the assessment merely on the basis of the same material, especially when the Assessee had furnished all relevant documents during the original assessment.
Final Decision: The appeal was dismissed as no substantial question of law arose, and the ITAT's decision was upheld.
JUDGMENT
1. The challenge by the Revenue in the present appeal is to an order dated 28th January, 2020 passed by the Income Tax Appellate Tribunal (ITAT), Cuttack Bench, Cuttack in ITA No.272 and 246/CTK/2017 for the Assessment Year (AY) 2010-11.
2. The question sought to be urged by the Revenue is whether the ITAT was justified in overturning the re-assessment order passed in respect of the Respondent-Assessee for the AY in question following the Judgment of the Supreme Court of India in CIT v. Kelvinator of India Ltd. 320 ITR 561(SC)?
3. Factually, it was determined by the ITAT that the Assessee had furnished all relevant documents in details at the time of original assessment and there was no new tangible material unearthed by the Revenue which would justify the reopening of the assessment. It was further held that merely because the Assessing Officer (AO) may not have applied his mind to the materials produced would not enable him to reopen the assessment merely on the basis of the same material.
4. Having heard learned counsel for the Revenue-Department, the Court is not satisfied that any error has been committed by the ITAT in following the aforementioned judgment of the Supreme Court in CIT v. Kelvinator of India Ltd. (supra) and rejecting the plea of the Revenue.
5. Hence, no substantial question of law arises and consequently, the appeal is dismissed.
Reopening of assessments under Section 147 requires tangible evidence of income escapement, not just a change of opinion.
The effect of reopening the assessment is to vacate or set aside the initial order of assessment and substitute in its place the order made in reassessment proceedings. The original assessment order ....
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