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Facts
For A.Y. 2013-14, BARDC Bank Bhatkal claimed a deduction u/s 80P, resulting in nil income, which was accepted in the original assessment u/s 143(3) on 19.12.2015. A reassessment notice u/s 148 was subsequently issued on 31.03.2021, beyond the four-year period, leading to the denial of the 80P deduction. The CIT(A) confirmed this, and the assessee appealed, challenging the reassessment's validity.
Held
The Tribunal held that the reassessment proceedings initiated under section 147/148 were invalid because the notice was issued after four years from the end of the relevant assessment year, and there was no allegation that the assessee failed to disclose fully and truly all material facts. The reopening was deemed a mere change of opinion by the Assessing Officer, based on information already available on record. Consequently, the assessment order passed under section 147 was quashed, and the legal issue was decided in favour of the assessee.
Key Issues
Whether reassessment proceedings initiated beyond four years under section 147/148 are valid when there was no failure to disclose material facts and the reopening was based on a mere change of opinion, challenging the denial of deduction under section 80P.
Sections Cited
147, 148, 143(3), 80P, 250, 144, 144B, 142(1), 139, 153
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PANAJI BENCH
Before: SHRI PAVAN KUMAR GADALE & SHRI G D PADMAHSHALI
Assessee by Shri.Ravish Rao.AR Revenue by Shri.Madesha N M . Sr.DR सुनवाई क� तार�ख/Date of Hearing 13.06.2025 घोषणा क� तार�ख/Date of Pronouncement 19.06.2025 ORDER
PER PAVAN KUMAR GADALE, JM:
The appeal is filed by the assesse against the order of the NFAC Delhi/CIT(A) passed u/sec147r.w.s144 r.w.s144B and u/sec 250 of the Act.(i) the assesse has raised the grounds of appeal
challenging the order of the CIT(A) sustaining denial of deduction u/sec80P of the Act made by the Assessing Officer. (ii) the assesse has filed the additional ground of appeal challenging the validity of issue of notice u/sec148 of the Act.
2. The brief facts of the case are that, the assesse is a primary co-operative agricultural and rural development BARDC Bank. bank Ltd with the main objective of providing the credit facilities to its members. The assessee has filed the return of income for the A.Y 2013-14 on 28.09.2013 disclosing a total income of Rs. Nil after claiming deduction u/sec 80P of the Act of Rs.1,50,20,300/- and the assessment was completed u/sec143(3) of the Act on 19.12.2015 assessing the total income of Rs.Nil. Subsequently the assessing officer after recording the reasons for reopening has reason to believe that the income has escaped assessment and has issued the notice u/sec148 of the Act dated 31.03.2021.Subsequently notice u/sec142(1) of the Act was issued and there was no compliance. Since, no details and explanations were filed, hence the AO considering the information available on record has invoked the provisions of Sec. 144 of the Act and denied the claim of deduction u/sec80P of the Act and assessed the total income of Rs.1,50,20,300/- and passed the order u/sec 147 r.w.s144 r.w.s144B of the Act dated 31.03.2022.
Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal, statement of facts and findings of the AO and has issued notices of hearing and since there was no compliance by the assessee to notices. Therefore the CIT(A) considering the information on record has confirmed the action of the A.O and dismissed the assesse appeal.
4. At the time of hearing, the Ld. AR of the assessee made submissions on the validity of reassessment proceedings beyond four years and further the notice was issued u/sec 148 of the Act after lapse of four years from the end of the assessment year and also the CIT(A) has erred in confirming the action of the assessing officer on denial of claim u/sec80P of the Act.Whereas the original assessment was completed u/sec143(3) of the Act on 19.12.2015.The assessee has made a full disclosure of material information in the original assessment proceedings and no new material or information was found by the A.O but it is only a mere change of opinion. The Ld.AR substantiated the submissions with judicial decisions and factual paper book and prayed for allowing the appeal. Per Contra, the Ld. DR relied on the order of the lower authorities.
We heard the rival submissions and perused the material on record and judicial decisions. The assesse has filed the additional ground of appeal on legal issue of validity of assessment u/s 147 of the Act. The Ld. AR emphasized that the A.O has issued the notice on the same set of information which was available on record in the original assessment and no material was available to make reassessment. It is only a mere change of opinion based on the subsequent judicial decision, were the assessment was BARDC Bank. concluded on 19-12-2015.The Ld. AR demonstrated the issue of notice u/sec 148 of the Act served on the assesse on 1-04-2021 as per income tax portal and referred to the screen shot of notice placed as Annexure-I and relied on the judicial decisions supporting the case were the reopening for A.Y.2013-14 gets time barred after 31-03- 2020 placed in the paper book. Further the original assessment was completed u/s 143(3) of the Act and the assesse has produced all the material information and the A.O. has duly verified the information and accepted the claim of deduction u/sec80P of the act which cannot be disputed. The assesse has also complied with the scrutiny guidelines in submitting the information and subsequently the A.O. has passed the order u/s 143(3) of the Act on19-12-2015.We considered it appropriate to refer to the provisions of Sec. 147 of the Act and the first proviso which is read as under:
“147. If the[Assessing] Officer[has reason to believe] that any income chargeable to tax has escaped assessment91for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess91 such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings91 under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : Provided that where an assessment under sub- section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub- section (1) of section 142 or section 148 or to disclose fully
Further we found that the A.O has issued notice u/s 148 of the Act dated 31.03.2021 for reopening of assessment. Whereas the original assessment was completed u/sec 143(3) of the Act vide order dated 19.12.2015. The A.O has recorded the reasons without any tangible material/ fresh material except charges based on judicial decision. The Ld.AR submitted that the information in respect of claim of deduction u/sec80P of the Act was already filed on record in the original assessment proceedings U/sec143(3) of the Act and the A.O after verifying the facts and information has passed order on 19-12-2015.Therefore the reopening of assessment is based on the same set of facts and is only a change of opinion.
We considering the facts and circumstances and evidences filed are of the view that the notice issued by the A.O falls beyond the period of time limit specified and the assessing officer has to show/high light the failure on part of the assessee to disclose fully and truly all material facts at the time of assessment. The Ld.AR demonstrated the reasons recorded for reopening of the assessment but on perusal of reasons there is no finding /allegation mentioning that there is a failure on the part of the assessee to fully and truly disclose material facts necessary for assessment. Accordingly, we find the notice BARDC Bank. issued for reassessment is bad in law and quash the assessment order passed u/sec 147 r.w.s144 r.w.s144B of the Act. Since the legal issue is decided in favour of the assessee and again adjudicating on merits becomes academic and are left open and we allow the ground of appeal
in favour of the assessee.
8. In the result, the appeal filed by assessee is allowed. Order pronounced in the open court on 19.06.2025.