Madras High Court Doesn't Allow Reopening Of Assessment After So Many Years

Madras High Court Doesn't Allow Reopening Of Assessment After So Many Years

The Court agreed with the Appellate Tribunal that the Assessee had furnished all necessary details required for completing the assessment

The Madras High Court has agreed with the Income Tax Appellate Tribunal that the reopening of an Income Tax assessment could not have been made in the facts and circumstances of the case after so many years.

The Division Bench of the High Court of Madras, comprising Justices T.S. Sivagnanam and Sathi Kumar Sukumara Kurup dealt with the matter titled Commissioner of Income Tax v Mr John Ettimootil Samuel.

The factual background was that the assessment for the year 2005-06 was completed by order dated 28 December 2007 under Section 143(3) of the Income Tax Act, 1961. However, the assessment was reopened u/S 147 of the Act, wherein the Assessing Officer modified the compounding fee to be inclusive of 8 per cent stamp duty and 1 per cent registration fee and completed the assessment by passing order on 30 November 2011.

The Respondent – Assessee preferred an appeal before the Income Tax Appellate Tribunal which agreed in the favour of the assessee and held that assessment could not have been reopened in the first place considering the facts and circumstances of the case. Therefore, the Appellant – Commissioner of Income Tax decided to file an appeal before the High Court against the Tribunal's order.

The Respondent – Assessee was not present for the hearing despite being served. The Appellant – Commissioner of Income Tax did not make any contentions as such but were aggrieved with the order of the Income Tax Appellate Tribunal, which set aside the reopened assessment order u/S 147 of the Act on the ground that the assessment should not have been reopened.

The Court agreed with the decision of the Appellate Tribunal that the reopening of the assessment after years with was no tangible material to establish that the Respondent – Assessee had failed to disclose fully and truly all materials, which were required for the assessment at the first instance. Furthermore, the Court took note of the fact that the Appellate Tribunal had confirmed that the Respondent – Assessee had furnished all necessary details required for completing the assessment.

The Court, therefore, dismissed the appeal by stating that the Appellate Tribunal was fully justified in holding that the reopening of the assessment could not have been made in the facts and circumstances of the case.