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SURYA PRAKASH KESARWANI, JAYANT BANERJI
Uphill Farms Private Limited – Appellant
Versus
Union of India – Respondent
JUDGMENT :
1. Heard Shri Nishant Mishra, learned counsel for the petitioner and Shri Manu Ghildyal, learned Standing Counsel for the respondent-Income Tax Department.
2. By order dated 11.04.2022, this Court specifically directed the respondent no.2, vide paragraph 10 of the order, as under :-
3. Today, a counter affidavit dated 22.04.2022 on behalf of the respondent no.2 has been filed by Kumari Sukanya Kirti, Assistant Commissioner of Income Tax, Circle 5(3)(1), Noida. In paragraph 3 thereof, the respondent no.2 has stated as under :-
(i) how the notice under Section 148 of the Act, 1961 issued
Point of Law : Power to reopen an assessment must be conditioned on the existence of “tangible material” and that “reasons must have a live link with the formation of the belief”.
The 'reason to believe' for reassessment must be based on tangible material with a direct nexus to the formation of the belief, and reassessment cannot be made on a change of opinion.
Under section 147 of the Act the proceedings for the reassessment can be initiated only if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any....
Reopening of assessment under the Income Tax Act requires tangible new material; mere change of opinion is insufficient.
The court emphasized the need for tangible material to believe that income had escaped assessment and held that the power to grant approval for re-opening an assessment is coupled with a duty and can....
Mere change of opinion is not a ground for reopening of assessment under Section 147 of the Income Tax Act, 1961.
Point of Law : Court satisfied that there was prima facie material available on record before the assessing officer for issuing a notice for reassessment and the notice under Section 148.
The judgment established the importance of tangible material and the prohibition of a mere change of opinion in the exercise of power under section 147 of the Income Tax Act.
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