Income Tax – Reassessment – concept of ‘change of opinion' is still valid?
IT is by now well settled that the AO cannot reopen an assessment simply due to a change of opinion but has the amendment with effect from 1st April, 1989, changed this concept?
This was the short question before the Supreme Court in a case decided on 18.01.2010.
The Supreme Court observed, “The Assessing Officer has no power to review; he has the power 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. Hence, after 1st April, 1989, Assessing Officer has power to re-open, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment.”
We bring you this judgement today.
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