Reopening of Assessment Barred Due to Change of Opinion and Delay in Filing SLP

Reopening of Assessment Barred Due to Change of Opinion and Delay in Filing SLP

Issue: Whether the reopening of an assessment under Section 148 of the Income-tax Act, 1961, is permissible when the Assessing Officer had already considered the relevant information during the original assessment proceedings, and whether the delay in filing the Special Leave Petition (SLP) by the revenue is a ground for dismissal.

Facts:

• The assessee filed its return of income, which was selected for scrutiny.
• An assessment order under Section 143(3) was passed, making additions under Section 68 (cash credit).
• Subsequently, a reopening notice was issued under Section 148, alleging that the assessee had not fully disclosed details regarding trading done through a broker.
• The reopening notice claimed that the return was processed under Section 143(1), and no scrutiny assessment was passed under Section 143(3), which was factually incorrect.
• The Assessing Officer had already possessed the transaction details through the broker during the original assessment.
• The High Court held that the reopening notice was based on a change of opinion, which is not permissible.
• The revenue filed an SLP against the High Court’s order with a gross delay of 185 days.

Decision:

• The Supreme Court upheld the High Court’s decision, stating that the reopening notice was indeed a change of opinion and not permissible under the law.
• The court also considered the gross delay of 185 days in filing the SLP by the revenue.
• The delay was not satisfactorily explained by the revenue.
• The court found no reason to interfere with the High Court’s order.
• The SLP filed by the revenue was dismissed on grounds of delay as well as on merits.

Key Takeaways:

• Reopening an assessment based on information already considered during the original assessment is not allowed.
• Change of opinion by the Assessing Officer cannot be a ground for reopening an assessment.
• Significant delays in filing appeals can lead to dismissal, especially if the delay is not adequately explained.