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Facts
The assessee's original assessment for AY 2017-18 was completed under Section 143(3) with an addition of Rs.5 lakhs under Section 69A for a gift. Subsequently, the assessment was reopened under Section 147 for alleged escapement of income of Rs.6 lakhs concerning the same gift from Sri Pradeep Tiwari, based on the same material. Both the Assessing Officer and CIT(A) upheld the reopening and the addition.
Held
The Tribunal found that the issue of the gift was already considered in the original assessment. The reopening was based on the same information without any fresh tangible material, constituting a 'change of opinion,' which is impermissible for reopening as per Supreme Court judgments like CIT vs. Kelvinator India Ltd. Thus, the reassessment order under Section 147 read with Section 144B was deemed invalid.
Key Issues
Whether the reopening of assessment under Section 147 was valid when based on a 'change of opinion' without fresh tangible material, regarding an issue already examined during the original assessment, and consequently, the validity of the addition made.
Sections Cited
143(3), 69A, 147, 148, 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD “SMC-B” BENCH: HYDERABAD
Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “SMC-B” BENCH: HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA G, ACCOUNTANT MEMBER ITA.No.827/Hyd./2025 Assessment Year 2017-2018 Sri Daya Shanker Tiwari, The Income Tax Officer, HYDERABAD – 500 082 vs. Ward-6(1), Hyderabad. PAN ABSPT0309E PIN-500 004. Telangana. (Appellant) (Respondent) For Assessee : CA, K A Sai Prasad For Revenue : Shri Vinod Kannan, Sr. AR Date of Hearing : 05.08.2025 Date of Pronouncement : 08.08.2025 ORDER PER MANJUNATHA G. :
The above appeal has been filed by the assessee against the order dated 17.03.2025 of the learned Commissioner of Income Tax-(Appeals)-National Faceless Appeal Centre [in short “NFAC], Delhi, relating to the assessment year 2017-2018.
Brief facts of the case are that, the assessee is an individual and has filed original return of income for the 2 ITA.No.827/Hyd./2025 assessment year 2017-2018 on 01.11.2017 declaring total income of Rs.12,91,705/-. The assessment has been completed under section 143(3) of the Income Tax Act, 1961 on 26.12.2019 and determined the total income of the assessee at Rs.16,91,705/- by making addition of Rs.5 lakhs under section 69A of the Income Tax Act, 1961as explained money towards gift received from Sri Pradeep Tiwari. The assessment has been, subsequently reopened under section 147 of the Act for the reasons, as per which, income chargeable to tax had been escaped assessment on account of under assessment of gift to the extent of Rs.6 lakhs received from Sri Pradeep Tiwari. Notice under section 148 of the Act dated 31.03.2021 was issued and served upon the assessee. In response to notice under section 148 of the Act, the assessee has filed return of income on 28.04.2021 declaring total income of Rs.11,72,000/-. During the course of assessment proceedings, the Assessing Officer called-upon the assessee to file relevant evidences including ITR, Affidavit, Statement of bank account of Sri Pradeep Tiwari to prove evidence of gift. In response, the 3 ITA.No.827/Hyd./2025 assessee has filed relevant details as called-for by the Assessing Officer. The Assessing Officer after considering the relevant submissions of the assessee, made addition of Rs.6 lakhs under section 69A of the Act as unexplained money towards gift received from Sri Pradeep Tiwari on the ground that, the assessee claims to have received a gift of Rs.11 lakhs from his son viz., Sri Pradeep Tiwari and on verification of bank account of Sri Pradeep Tiwari, he does not have sufficient funds for giving gift to the extent of Rs.11 lakh. Further, on verification of assessment order, it was found that only Rs.5 lakhs addition was made to the return income instead of Rs.11 lakhs, which is gifted by the assessee’s son. Therefore, the short computation of income to the extent of Rs.6 lakhs is treated as unexplained money and added back under section 69A of the Act.
Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A). Before the learned CIT(A), the assessee has challenged reopening of the assessment under section 147 of the Act on the ground of ‘change of opinion’ and also challenged addition made
4 ITA.No.827/Hyd./2025 towards gift received from Sri Pradeep Tiwari for Rs.6 lakhs. The learned CIT(A) after considering the relevant facts, rejected the legal ground taken by the assessee challenging the validity of reopening of assessment and also sustained the addition made towards gift received from Sri Pradeep Tiwari for Rs.6 lakhs. 4. Aggrieved by the CIT(A) order, the assessee is now, in appeal before The Tribunal.
CA, K A Sai Prasad, Learned Counsel for the Assessee referring to the assessment order passed under section 143(3) of the Act dated 26.12.2019 and subsequent reassessment order passed under section 147 of the Act dated 30.03.2022 submitted that, the Assessing Officer has considered the issue of gift received from Sri Pradeep Tiwari for Rs.11 lakhs and has made addition of Rs.5 lakhs in the assessment order section 143(3) of the Act. Further, the assessment has been reopened on very same issue without any fresh tangible material came to the possession of the Assessing Officer subsequent to the completion of original assessment, which amounts to ‘change of opinion’ and thus,
5 ITA.No.827/Hyd./2025 the reassessment order passed by the Assessing Officer is invalid and cannot be sustained. In this regard, he relied upon the decision of Hon’ble Bombay High Court in the case of Castrol India Ltd., vs., DCIT [2025] 474 ITR 290 (Bom.).
Sri Vinodh Kannan, learned Sr. AR for the Revenue, on the other hand, supporting the order of the learned CIT(A) submitted that, the Assessing Officer has reopened the assessment on the ground of escapement of income on account of under assessment of gift received from Sri Pradeep Tiwari. Although, the assessee claims to have received gift of Rs.11 lakhs, but, the Assessing Officer has made addition of Rs.5 lakhs in the original assessment, which resulted in escapement of income to the tune of Rs.6 lakhs. The Assessing Officer after considering the relevant facts, has rightly reopened the assessment and, therefore, the argument of Counsel for the Assessee that, it is change of opinion is devoid of merit and cannot be accepted. So far as gift received by the assessee, no evidence has been filed to prove the capacity of the donor and in absence of relevant
6 ITA.No.827/Hyd./2025 details, the Assessing Officer has rightly made addition and thus, the order of the Assessing Officer should be upheld.
We have heard both the parties, perused the material on record and gone through the orders of the authorities below. There is no dispute with regard to the fact that, the Assessing Officer has considered the issue of gift received from Sri Pradeep Tiwari in the assessment order passed under section 143(3) of the Act dated 26.12.2019, where the Assessing Officer has discussed the issue in light of relevant submissions of the assessee and after considering relevant details, has made addition of Rs.5 lakhs being gift paid in cash under section 69A of the Income Tax Act, 1961. It is also an admitted fact that, the assessment has been subsequently reopened under section 147 of the Act on very same issue i.e., gift received from Sri Pradeep Tiwari for Rs.11 lakhs on the ground that, although, the assessee has received Rs.11 lakhs, but, on verification of assessment order, it was found that, only Rs.5 lakhs has been made addition to the returned income instead of Rs.11 lakhs which is gifted by the assessee’s son.
7 ITA.No.827/Hyd./2025 From the assessment order passed under section 143(3) of the Act and subsequent assessment order passed under section 147 of the Act, it is undisputedly clear that, the Assessing Officer has formed a reasonable belief of escapement of income, on the basis of very same information, which was available during the course of original assessment proceedings without there being any fresh tangible material. In absence of fresh tangible material, formation of belief of escapement of income, in our considered view, is a ‘change of opinion’ on the basis of very same material, which is not permissible under law.
At this stage, it is relevant to refer to the decision of Hon’ble Supreme Court in the case of CIT vs., Kelvinator India Limited [2010] 320 ITR 561 (SC), wherein it has been clearly held that, “mere change of opinion, cannot be a ground for reopening of concluded assessment”. The Hon’ble Apex Court very categorically held that, “the conceptual difference between power to review and power to re-assess must be keep in mind while reopening the assessment. The Assessing Officer has no power to review; he has the power
8 ITA.No.827/Hyd./2025 to re-assess. But, re-assessment has to be based on fulfilment of certain pre-condition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer”. A similar view has been expressed by the Hon’ble Bombay High Court in the case of Castrol India Limited vs., DCIT (supra), wherein it has been clearly held that “reopening of the assessment was purely on re-examination of very same material, on the basis of which, original assessment order was passed is invalid and liable to be quashed”. In the present case, there is no dispute with regard to the fact that, the Assessing Officer has considered the very same material, which were available to the Assessing Officer at the time of passing the order under section 143(3) of the Act and thus, in our considered view, it is a clear case of ‘change of opinion’ and thus, the reopening of the assessment and consequent assessment order passed by the Assessing Officer under section 147
9 ITA.No.827/Hyd./2025 r.w.s.144B of the Act dated 30.03.2022 is invalid and liable to be quashed. Thus, we quash the assessment order passed by the Assessing Officer.
In the result, appeal of the assessee is allowed.
Order pronounced in the open Court on 08.08.2025.