Mr. Radhakrishnan V. National Faceless Assessment Centre (NAFAC) and The Deputy Commissioner of Income Tax (Assessment) and Income Tax Officer, Ward I & TPS, Tirur

WP(C)/13185/2023

AI Insights

The case involves Mr. Radhakrishnan, the petitioner, who is an assessee under the Income Tax Act, 1961. Initially, his income for the assessment year 2016-17 was assessed, and subsequent reopening of the assessment was based on a suspicious transaction of Rs. 19,12,00,000 noticed in his bank account. The Income Tax Department issued notices under Sections 143(2) and 148, leading to multiple assessments. The petitioner contested the latest reopening under Section 148A(b), arguing it was a mere change of opinion regarding the same transaction previously considered in an earlier assessment. The court agreed with the petitioner, stating that reopening the assessment on the same grounds constituted a change of opinion, which is not allowed.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 799676 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 15-01-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: S CHRISTOPHER ABRAHAM
• Assessee Lawyers: LATHA ANAND; M N MENON; S ARIKATTILL
• Keywords: Assessment Year 2016-17; Change of opinion; Income Tax; Re-opening of assessment; Suspicious transaction
• Section: 148; 143(3); 143(2); 148A(b); 148A(d)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH MONDAY, THE 15TH DAY OF JANUARY 2024 / 25TH POUSHA, 1945 WP(C) NO. 13185 OF 2023 PETITIONER/S: MR RADHAKRISHNAN, AGED 53 YEARS NO 477, PETTERIVALAPPIL, MUKKUTHALA, NANNAMUKKU, ALAPPURAM DISTRICT, PIN -676101. BY ADVS. LATHA ANAND M.N.RADHAKRISHNA MENON S.VISHNU (ARIKKATTIL) RESPONDENT/S: 1 NATIONAL FACELESS ASSESSMENT CENTRE (NAFAC), MAYUR BHAWAN, CONNAUGHT LANE, BARAKHAMBA ROAD, NEW DELHI- 110001, REPRESENTED BY THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX (NAFAC). 2 THE DEPUTY COMMISSIONER OF INCOME TAX (ASSESSMENT), INCOME TAX OFFICE, NO. 20/1240, TARIFF BAZAR, TOWN HALL ROAD, TIRUR- 676101 3 INCOME TAX OFFICER, WARD I & TPS, TIRUR , NO. 20/1240, TARIFF BAZAR, TOWN HALL ROAD, TIRUR - 676101 BY ADVS. S.MANU CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT OTHER PRESENT: CHRISTOPHER ABRAHAM-SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 15.01.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC No.13185 of 2023 2 JUDGMENT Dated this the 15th day of January, 2024 Heard Sri. Latha Anand assisted by Sri. S.Vishnu, learned counsel appearing for the petitioner. 2. The petitioner is an assessee under the provisions of the Income Tax Act, 1961. The petitioner had filed his return of income for the assessment year 2016-17, declaring his total income of Rs. 24,16,280/- which would be excluding the agricultural income of Rs.4,11,250/-. 3. The petitioner’s case was selected for scrutiny through the Computer Assisted Scrutiny Selection (CASS) and notice under Section 143(2) was issued to the petitioner on 09.08.2018. The petitioner’s Chartered Accountant appeared and furnished replies to the said show cause notice. In the assessment order dated 28.08.2018 passed under Section 143(3) of the Income Tax Act an addition of Rs.24,94,500/- was made and assessed income came to be Rs.25,10,780/-. The WPC No.13185 of 2023 3 petitioner paid the tax on the said income and also it appears that the amount of penalty was also paid. 3. The petitioner’s case was re-opened as suspicious transaction in the assessment year for an amount of Rs.19,12,00,000/- was noticed and no details of the source of the relevant transaction could be verified for the assessment year 2016-17 and this was the reason for initiation of proceedings under Section 148. The notice under Section 148 was issued on 31.03.2021. The assessee furnished return under Section 148 through e- filing declaring total income for the assessment year 2016-17. A notice under Section 143(2) was issued on 15.11.2021 to which the assessee furnished the reply and after issuing notice under Section 142(1), the assessment order was finalised on the return of income of the petitioner. Again notice under Section 148 was issued to the petitioner on the ground that suspicious transaction was noticed in the Allahabad Bank account of the petitioner for an amount of Rs. 19,12,00,000/-. An order under Section 148A(b) came to be passed on 03.04.2023 WPC No.13185 of 2023 4 and a decision was taken to re-open the assessment under Section 148 for the assessment year 2016-17 and thereafter, notice under Section 148 has been issued to the petitioner requiring him to file return of his income for the assessment year 2016-17. 4. Learned counsel for the petitioner submits that the impugned order passed under Section 148A(b) is nothing but change of opinion in respect of suspicious transaction of Rs.19,12,00,000/- which was considered when 1st time the assessment order was re-opened and which was finalized vide order dated 16.03.2022 in Ext.P2. There can be no doubt that the same transaction which was taken note of in Ext.P2 order is again the basis for re-opening the assessment of the petitioner for the assessment year 2016-17 in respect of Order under Section 148A(d) has been passed on 03.04.2023. Once the said amount was under consideration in the earlier proceedings finalised, for the same amount issuance of the order under Section 148A(d) would amount to a change of opinion. It is well settled that, merely on the WPC No.13185 of 2023 5 basis of the change of opinion, an order of assessment which has been finalised cannot be re-opened. Thus, I find substance in the submission made by the learned counsel for the petitioner that the decision to re- open the assessment order in respect the alleged suspicious transaction of Rs.19,12,00,000/- in the bank account of the petitioner is nothing but change of opinion and on the basis of the change of opinion the assessment order cannot be re-opened. Thus, the present writ petition is allowed, the impugned order is set aside. However, it would be opened to the respondent authority to take recourse to any other remedy as may be available to them under the law. Sd/- DINESH KUMAR SINGH JUDGE AP WPC No.13185 of 2023 6 APPENDIX OF WP(C) 13185/2023 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 27/11/2018 ISSUED BY THE 2ND RESPONDENT Exhibit P2 TRUE COPY OF THE ASSESSMENT ORDER DATED 16/03/2022 ISSUED BY THE 1ST RESPONDENT Exhibit P3 TRUE COPY OF THE NOTICE DATED 20/03/2023 UNDER SECTION 148A(B) OF THE ACT ISSUED BY THE 3RD RESPONDENT Exhibit P4 TRUE COPY OF THE ORDER DATED 03/04/2023 ISSUED BY THE 3RD RESPONDENT Exhibit P5 TRUE COPY OF THE NOTICE DATED 03/04/2023UNDER SECTION 148 OF THE ACT ISSUED BY THE 3RD RESPONDENT "