SC: A detailed assessment doesn’t affect powers u/s 147 Income Tax Act

The Hon’ble Supreme Court, on 3rd April 2020, in the matter of New Delhi Television Ltd. v. Deputy Commissioner Of Income Tax pronounced that merely the fact that the original assessment is a detailed one, cannot take away the powers of the assessing officer to issue notice under Section 147 of the Income Tax Act, 1961. Information which comes to the notice of the assessing officer during proceedings for subsequent assessment years can definitely form tangible material to invoke powers vested with the assessing officer under Section 147 of the Income Tax Act, 1961.

The Hon’ble Supreme Court observed that:

Merely the fact that the original assessment is a detailed one, cannot take away the powers of the assessing officer to issue notice under Section 147 of the Income Tax Act, 1961. (Para 12)

An assessing officer can only re­open an assessment if he has ‘reason to believe’ that undisclosed income has escaped assessment. Mere change of opinion of the assessing officer is not a sufficient to meet the standard of ‘reason to believe’. (Para 14)

Whether the facts which came to the knowledge of the assessment officer after the assessment proceedings for the relevant year were completed, could be taken into consideration for coming to the conclusion that there were reasons to believe that income had escaped assessment ?

Subsequent facts which come to the knowledge of the assessing officer can be taken into account to decide whether the assessment proceedings should be re­opened or not. Information which comes to the notice of the assessing officer during proceedings for subsequent assessment years can definitely form tangible material to invoke powers vested with the assessing officer under Section 147 of the Income Tax Act, 1961. (Para 22)

The assessee must be put to notice of all the provisions on which the revenue relies upon. (Para 41)

Copy of judgement: Judgement_03-April-2020

-Adv. Tushar Kaushik

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