By TIOL News Service

MUMBAI, AUG 14, 2017: THE ISSUE BEFORE THE COURT IS - Whether mere differences in opinion of another AO, can be a ground to reopen assessment. NO is the verdict.

Facts of the case:

The Revenue preferred the present appeal challenging the action of ITAT in annulling the Assessment reopened u/s 147 on the ground of change of opinion by the AO, without appreciating the fact that the Assessment was reopened on the basis of reasons to believe that income of the Assessee chargeable to tax had escaped assessment as the Assessee did not disclose truly and fully all the facts. The audit objection was raised and in view of the CBDT Circular No.9 of 2006, dated 7th November, 2006, the reopening of Assessment was correctly resorted to.

On appeal, the HC held that,

++ it is seen that in the explanation, the Assessee explained about the claim for setof of loss incurred on selling of housing loan portfolio. The AO accepted the explanation given by the Assessee and allowed setof of loss arising on sell of housing loan portfolio. Merely because the another AO has a different opinion cannot be a ground to reopen assessment and so also on the reason of audit object remedial action by initiating reopening proceeding cannot be resorted to as held by the Apex Court in case of Indian and Eastern Newspaper Society vs. CIT - 2002-TIOL-870-SC-IT-LB. The Commissioner (Appeals) and the Tribunal on considering the explanation given by the Assessee and the facts on record had arrived at a concurrent conclusion that reopening of assessment is merely on account of change of opinion of the Assessing Officer and there was no omission or failure on the part of the Assessee to disclose truly and fully all the material facts.

(See 2017-TIOL-1546-HC-MUM-IT)