THE COMMISSIONER OF INCOME TAX FARIDABAD V. M/S ASAHI ALPHA LTD.FARIDABAD

ITA/251/2004

AI Insights

The case revolves around an appeal by the Commissioner of Income Tax, Faridabad against M/s Asahi Alpha Limited concerning the reassessment of income tax for the assessment year 1989-90. The primary legal issue was whether the reassessment conducted under section 147 of the Income Tax Act, 1961 was valid, given that it was based on a change of opinion regarding the admissibility of a deduction under section 35AB of the Act. The Income Tax Appellate Tribunal had earlier set aside the reassessment, deeming it without jurisdiction, a decision which was upheld by the High Court of Punjab and Haryana.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 719435 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 06-10-2010
• Assessment Year: misc
• Other Referred Cases: Jindal Photo Films Limited v. Deputy Commissioner of Income Tax and another, CIT v. Kelvinator of India Limited
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: AVNEESH JHINGAN
• Assessee Lawyers: URVASHI DHUGGA
• Keywords: Change of opinion; Deduction; Income Tax; Jurisdiction; Reassessment
• Section: 147; 148; 143(3); 260A; 35AB

Judgement Text

"ITA No.251 of 2004 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITA No. 251 of 2004 Date of decision: 6.10.2010 The Commissioner of Income Tax , Faridabad -----Appellant Vs. M/s Asahi Alpha Limited, Faridabad ----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Ms. Urvashi Dhugga, Advocate for the appellant. Mr. Avneesh Jhingan, Advocate for the respondent. Adarsh Kumar Goel,J. 1. This appeal has been preferred under section 260A of the Income Tax Act, 1961 (for short, ‘the Act’) against order dated 31.12.2003 passed by the Income Tax Appellate Tribunal, Delhi in ITA No.24/Del/2001 for the assessment year 1989-90, proposing to raise following substantial question of law:- “Whether on the facts and in the circumstances of the case, the Hon’ble ITAT has erred in holding that the assessment in the given case has been reopened under section 147 without jurisdiction even when the assessment was reopened after 1.4.1989 under the amended provisions of Section 148 and even when the Assessing Officer had every reason to believe that income chargeable to tax had escaped assessment due to wrong allowance of deduction under section 35AB of the Act to the assessee?” 1 ITA No.251 of 2004 2. The Assessing Officer made assessment under section 143 (3) of the Act but later re-opened the same on the ground that deduction allowed to the assessee under section 35AB of the Act was not admissible. The addition made after re-assessment was upset by CIT (A) but the Tribunal set aside the same on the ground that re- assessment itself was without jurisdiction. Finding recorded is as under:- “However, mere change of opinion on the part of the Assessing officer on the same set of facts considered earlier by the while making the original assessment would not confer jurisdiction under section 147 as held by the Delhi High Court in Jindal Photo Films Limited 234 ITR 171. I have, therefore, no hesitation to uphold the view taken by the CIT(A) that the assessment has been reopened without jurisdiction and is, therefore, liable to be cancelled.” 3. The above view has been taken relying upon judgment of Delhi High Court in Jindal Photo Films Limited v. Deputy Commissioner of Income Tax and another, (1998) 234 ITR 170. 4. We have heard learned counsel for the parties and perused the record. 5. Learned counsel for the assessee points out that the view taken by Delhi High Court in Jindal Photos Films Limited has been approved by the Hon’ble Supreme Court in CIT v. Kelvinator of India Limited, (2010) 320 ITR 561. It has been held that mere change of opinion cannot be a ground for re-assessment. In the present case, in the original order of assessment, the issue was considered and 2 ITA No.251 of 2004 deduction was allowed. Re-opening of the assessment on the issue was, thus, on mere change of opinion. Recourse to Section 147 of the Act may have been permissible if Explanation 2 (c) (iv) to Section 147 was applicable but in the present case, the said provision has not been and cannot be invoked as in the original assessment order itself, the deduction had been held to be applicable. 6. The view taken by the Tribunal, cannot, thus, be held to be erroneous. The question raised by the revenue has thus, to be decided against it. 7. The appeal is dismissed. (Adarsh Kumar Goel) Judge October 6, 2010 (Ajay Kumar Mittal) ‘gs’ Judge 3 "