“Section 151(2)”
The decision most relied on for Section 151(2) is CIT v. Kelvinator of India Ltd. (320 ITR 561), cited in 1,673 judgments on BharatTax.
Leading authorities on Section 151(2)
An Assessing Officer cannot initiate reassessment proceedings under Section 147 of the Income Tax Act based on a mere change of opinion. Reassessment is permissible only when there is fresh tangible material leading to the belief of income escapement, not merely a review of existing facts.
When a notice under Section 148 of the Income Tax Act is issued, the Assessing Officer is bound to furnish reasons for reopening upon the assessee's request and must dispose of the assessee's objections to the notice by passing a speaking order.
The assessee's duty is limited to disclosing all primary, material facts necessary for assessment, including entries, documents, and other evidence. It is for the Assessing Officer to draw inferences of fact and law, and the assessee is not obligated to offer such inferences.
Reasons for reopening an assessment must be specific and not vague, scanty, or based on borrowed satisfaction. The Assessing Officer must quantify the escaped income.
The Commissioner's revisional power under Section 263 of the Income Tax Act is not limited to the points specified in the show-cause notice, nor is the exercise of this power contingent upon issuing a show-cause notice.
The Assessing Officer lacks jurisdiction to make a reassessment if the very grounds on which the notice under Section 148 was issued are subsequently found not to exist. In such a scenario, the reassessment proceedings must be cancelled.
The lack of jurisdiction to initiate reassessment proceedings under Section 147/148 cannot be waived and can be challenged at a later stage, even if not raised initially. An invalid reassessment due to such jurisdictional defects cannot sustain subsequent penalty proceedings.
An Assessing Officer cannot issue a notice under Section 148 to reopen an assessment when all material facts were already before the AO during the original assessment, even if the AO failed to apply their mind at that time. Such an action constitutes an impermissible review of a concluded assessment rather than a reassessment based on fresh tangible material.
