ABHIYOG HOLDINGS PVT LTD Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioner in this petition under Article 226 of the Constitution of India has challenged the notice dated 7 th January, 2005 issued by the respondent under section 148 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') reopening the assessment for assessment year 2001-02.

(2.) THE petitioner, a private limited company, filed its return of income for assessment year 2001-02 on 31 st October, 2001 declaring total income of Rs.31,039/-. The case of the petitioner came to be taken in scrutiny and an assessment came to be framed under section 143(3)(i) of the Act on 24 th February, 2004. Subsequently, by the impugned notice, the Assessing Officer sought to reopen the assessment for the year under consideration. On request made by the petitioner to furnish a copy of the reasons recorded, the Assessing Officer furnished such reasons which read as under:-

(3.) MR. B.S. Soparkar, learned advocate for the petitioner invited attention to the reasons recorded to submit that the sole ground for reopening the assessment is in respect of the diversion of interest bearing fund for non-business purpose. Referring to the assessment as originally framed under section 143(3) of the Act, it was pointed out that originally in scrutiny assessment, two issues had been raised one of which was as regards the interest bearing fund having been diverted for non-business purpose. It was submitted that pursuant to the notice issued by the Assessing Officer under section 143(2) of the Act, the petitioner had filed detailed submissions. That the Assessing Officer on being satisfied that the explanation given by the petitioner had, by a reasoned order, allowed the claim of the petitioner. It was submitted that while reopening the assessment, the Assessing Officer has not come across any new or additional material for the purpose of forming a belief that income chargeable to tax has escaped assessment. Therefore, the reopening is based on a mere change of opinion which is not permissible in law. In support of the submission, the learned advocate placed reliance upon the decision of the Supreme Court in the case of Commissioner of Income-Tax vs. Kelvinator of India Ltd., 320 ITR 561. It was accordingly submitted that reopening of the assessment being based upon mere change of opinion, the assumption of jurisdiction by the Assessing Officer under section 147 of the Act is without authority of law and as such, the impugned notice deserves to be quashed and set aside.