Reassessment u/s 147 after 4 years invalid without new tangible material or proven failure to disclose material facts; mere reappraisal of records is change of opinion.

ORDER

PER SANDEEP SINGH KARHAIL, J.M.

The assessee and the Revenue have filed the present cross-appeal against the impugned order dated 03/10/2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”), by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“learned CIT(A)”], for the assessment year 2012-13.

ITA No. 9465/Mum/2025 Assessee’s appeal – A.Y. 2012-13

2. In this appeal, the assessee has raised the following grounds: -

“1. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the reassessment done by the AO by issuing notice dated 30.03.2019 w/s. 148 of the Act is valid notwithstanding the following facts:

a) The assessment was reopened after four years without any mention of failure by the appellant to fully disclose material facts, as required by law.

Therefore, the condition for reopening was not satisfied.

b) No new tangible material. The AO's reliance on judicial decisions in Tourism Finance Corporation (2010) and National Coop Development Corporation (2012) cannot constitute new material, as these rulings existed at the time of the original assessment.

c) Re-opening on the basis of audit objection is on borrowed satisfaction and non-application of mind on the part of the Ld. AO.

1.1. Accordingly, the Ld. CIT(A) ought to have held that the action of the AO of not allowing deduction u/s. 36(1)(viii) on interest income of Rs. 24,11,75,651/- cared from HUDCO Bonds constitutes change of opinion and therefore, ought to have quashed / annulled the reassessment order dated 22.12.2019 passed w/s. 143(3) r.w.s. 147.

1.2. In view of the same, it is humbly prayed that the re-assessment initiated by notice dated 30.03.2019 u/s. 148 is illegal and bad-in-law and the order dated 22.12.2019 passed u/s. 143(3) r.w.s. 147 of the Act be quashed / annulled.

Without prejudice to the above and in the alternate

2. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the AO of holding that the interest income of Rs. 24,11,75,651/- on HUDCO bonds is an investment income and not income earned on loan / advances provided in connection with the activities of providing long- term finance in terms of Explanation (h) to Section 36(I)(viii) of the Act. The Ld. CIT(A) ought to have held that said income is eligible for determination of deduction u/s. 36(1)(viii).

2.1. Therefore, it is humbly prayed that a direction be given to the AO to include the above income as an eligible income for the determination of deduction u/s. 36(1)(viii) and grant the deduction accordingly.”

3. Ground No.1, raised in assessee’s appeal, pertains to the validity of reassessment proceedings initiated under section 147 of the Act.

4. The brief facts of the case pertaining to this issue, as emanating from the record, are: The brief facts of the case are that the assessee is an entity established by an Act of Parliament titled the Export-Import Bank of India Act, 1981. The entire capital of the assessee is subscribed by the Government of India. The main object of the assessee is to facilitate export. For this purpose, various types of activities, including long-term project finance outside India and other export financing, have been taken up by the assessee since its establishment. For the year under consideration, the assessee filed its return of income on 27/09/2012, declaring a total income of INR 1314,40,80,112. The return filed by the assessee was selected for s