M/S. PRADEEP STAINLESS STEEL vs. THE DEPUTY COMMISSIONER OF

PDF · subscribers
TCA/492/2016HC Madras01 July 2025Bench: Honourable The CHIEF JUSTICE6 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the questions of law were answered in favour of the assessee. The Court noted that the Assessing Officer had issued multiple questionnaires under Section 143(2) and the assessee had provided all details. The Court emphasized that the manner in which an assessment order is drafted is within the sole domain of the Assessing Officer, and the assessee cannot insist on all questions being raised. Once a question is raised and replied to, it implies the Assessing Officer was satisfied. Therefore, there was no need for fresh assessment. The Court concluded that the re-opening of the assessment was merely based on a change of opinion by the Assessing Officer, which does not constitute justification or reasons to believe that income chargeable to tax had escaped assessment. The appeal was allowed.

What were the facts?

For Assessment Year 2005-06, the assessee, Pradeep Stainless Steel India P Ltd., initially filed a return of income of Rs.44,982/-. The original assessment under Section 143(3) was completed on 26.12.2007. Subsequently, a notice under Section 148 was issued, leading to a re-assessment under Section 147. The re-assessment order dated 30.08.2010 determined the assessee's income at Rs.2,01,58,510/-. The Commissioner of Income Tax (Appeals) allowed the assessee's appeal. The revenue appealed to the Income Tax Appellate Tribunal (ITAT), which, by an order dated 20.11.2015, confirmed the validity of the re-assessment and remitted the matter back to the CIT(A). The present appeal challenges the ITAT's order.

What were the issues?

1. Whether the Appellate Tribunal is correct in law in sustaining the re-assessment framed for Assessment Year 2005-06 under Section 143(3) read with Section 147 of the Income-tax Act, 1961, even though the issue forming the basis for assumption of jurisdiction was scrutinized and accepted in the original assessment under Section 143(3) for the same year. 2. Whether the Appellate Tribunal is correct in law in sustaining the re-assessment when there was no tangible material for assuming jurisdiction and an apparent change of opinion by the Assessing Officer in revisiting a concluded issue. Assessee's Contentions: The re-assessment was based on a change of opinion, as the issue forming the basis for re-opening was already considered and accepted in the original assessment. The assessee argued that the Assessing Officer had issued multiple questionnaires under Section 143(2) and provided all details, implying satisfaction. The assessee relied on the principle that a change of opinion does not constitute justification for re-opening an assessment. Revenue's Contentions: The revenue contended that the Assessing Officer did not ask for specific details regarding share allotment to partners after succession, justifying the re-opening. The ITAT held that since no opinion was explicitly expressed in the original assessment order, it was not a case of change of opinion.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 260A

AI-generated summary — verify with the full judgment below

TCA No.492 of 2016 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 01.07.2025 CORAM : THE HON'BLE MR.K.R.SHRIRAM, CHIEF JUSTICE AND THE HON'BLE MR.JUSTICE SUNDER MOHAN TCA No.492 of 2016 Pradeep Stainless Steel India P Ltd., C-3 Phase II, Main Road, MEPZ, Tambaram, Chennai-600 045. Appellant Vs The Deputy Commissioner of Income Tax, Company Circle-V(2), Income Tax Department, Chennai-600 034. Respondent Prayer: Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal “A” Bench, Chennai, dated 20.11.2015 in ITA No.1750/Mds/2013. __________ Page 1 of 6 https://www.mhc.tn.gov.in/judis ( Uploaded on: 21/07/2025 04:08:07 pm ) TCA No.492 of 2016 For Appellant: Mr.A.Sriraman For Respondent: Mrs.V.Pushpa JUDGMENT (Delivered by the Hon'ble Chief Justice) For the assessment year 2005-06, assessee, who is appellant herein, filed return of income on 5.10.2005 admitting a total income of Rs.44,982/- The assessment was completed under Section 143(3) of the Income-tax Act, 1961 [the Act] vide an order dated 26.12.2007. Subsequently, notice under Section 148 of the Act was issued and the assessment was subjected to re-assessment under Section 147 of the Act and re-assessment order under Section 143(3) read with Section 147 of the Act came to be passed on 30.08.2010 re-assessing assessee's income at Rs.2,01,58,510/-. Against the said order, an appeal was filed by assessee and the Commissioner of Income Tax (Appeals) [CIT(A)] allowed the appeal by an order dated 13.06.2013. 2. Aggrieved, revenue has preferred an appeal before the Income Tax __________ Page 2 of 6 https://www.mhc.tn.gov.in/judis ( Uploaded on: 21/07/2025 04:08:07 pm ) TCA No.492 of 2016 Appellate Tribunal [the ITAT], which, by an order dated 20.11.2015, confirmed the validity of the re-assessment order and remitted the matter back to the file of CIT(A). It is that order, which is challenged by assessee. On 01.07.2016, the following two substantial questions of law were framed while admitting the appeal: “1. Whether the Appellate Tribunal is correct in law in sustaining the re-assessment framed for the Assessment Year 2005-06 u/s 143(3) r/w section 147 of the Act even after noticing the issue which formed the basis for assumption of jurisdiction for framing the said re- assessment was taken up for scrutiny and accepted in the original assessment framed on 26.12.2007 u/s.143(3) of the Act by the Respondent for the very same Assessment Year 2005-06? 2. Whether the Appellate Tribunal is correct in law in sustaining the re-assessment framed even though there was no tangible materials for assuming such jurisdiction to frame the said re-assessment as well as the apparent change of opinion on his part in revisiting the concluded issue in the original assessment framed?” 3. The ITAT has accepted the fact that before the original assessment order under Section 143(3) of the Act was passed on 26.12.2007, multiple questionnaires under Section 143(2) of the Act were issued and assessee provided all details. The ITAT, however, says that Assessing Officer did not ask details of share allotted to each partner of the erstwhile firm, after succession and, therefore, re-opening was justified. According to the ITAT, as no opinion was expressed in the original assessment order, it was not a __________ Page 3 of 6 https://www.mhc.tn.gov.in/judis ( Uploaded on: 21/07/2025 04:08:07 pm ) TCA No.492 of 2016 case of change of opinion. 4. The fact that questionnaires were issued is admitted. The fact that assessee replied to all the questions is also not disputed. What questionnaire is to be issued is totally in the control of Assessing Officer and assessee has no control over it. 5. As held in Aroni Commercials Ltd. v. Deputy Commissioner of Income-tax-2(1) 1, the manner in which an assessment order is to be drafted is within the sole domain of Assessing Officer and it is not open to assessee to insist that Assessing Officer must raise all questions. We are of the view that once the question has been raised during the assessment proceedings and assessee has replied to it, it follows that Assessing Officer was satisfied that no other query is required to be raised. 6. In the circumstances, there was absolutely no need to refer the matter for fresh assessment. It is quite clear that re-opening of the assessment is merely on the basis of change of opinion of Assessing Officer 1 [2014] 44 taxmann.com 304 (Bombay) __________ Page 4 of 6 https://www.mhc.tn.gov.in/judis ( Uploaded on: 21/07/2025 04:08:07 pm ) TCA No.492 of 2016 from that held earlier during the course of assessment proceeding leading to the original assessment passed under Section 143(3) of the Act. This change of opinion does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment. The questions of law framed are answered in favour of assessee. Appeal is allowed. There shall be no order as to costs. (K.R.SHRIRAM, CJ.) (SUNDER MOHAN, J.)

01.07.2025 Index : Yes/No Neutral Citation : Yes/No bbr To: 1. The Assistant Registrar Income Tax Appellate Tribunal “A” Bench, Chennai. 2. The Commissioner of Income Tax (Appeals)-V, Chennai. 3. The Assistant Commissioner of Income Tax, Company Circle V(2), Chennai-34. __________ Page 5 of 6 https://www.mhc.tn.gov.in/judis ( Uploaded on: 21/07/2025 04:08:07 pm ) TCA No.492 of 2016 THE HON'BLE CHIEF JUSTICE AND SUNDER MOHAN,J. bbr

TCA No.492 of 2016

01.07.2025 __________ Page 6 of 6 https://www.mhc.tn.gov.in/judis ( Uploaded on: 21/07/2025 04:08:07 pm )

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →