Non-rejection of explanation in Assessment Order amounts to AO accepting it

Non-rejection of explanation in Assessment Order amounts to AO accepting it hence no reopening on change of opinion. SC upholds High Court judgment

ABCAUS Case Law Citation:
ABCAUS 3322 (2020) (06) SC

In a recent judgment, the Hon’ble Supreme Court had dismissed the Special Leave Petition filed by the Revenue against the judgment of the High Court quashing the notice for reopening issued u/s 148 of the Income Tax Act, 1961 (the Act).

In the instant case, during the course of the assessment proceedings u/s 143(2), certain queries were raised by the Assessing Officer (AO) on which were duly responded and replied to by the assessee and after considering said responses, the assessment order was passed by the Assessing Officer.

Subsequently, a notice was issued u/s 148 of the Act seeking to re-open the case.

The assessee challenged the said notice issued u/s 148 of the Act before the Hon’ble High Court.

Non-rejection of explanation in Assessment Order amounts to acceptance 

The Hon’ble High Court observed that the notice was issued with respect to the very issue in respect of which the Assessing Officer, had raised the query during the assessment proceedings and the Petitioner had responded to the same by its letters justifying its stand.

The Hon’ble High Court held that the non-rejection in the Assessment Order of the explanation tendered by the assessee would amount to the Assessing Officer accepting the view of the assessee by taking a view/forming an opinion. Therefore, the reasons in support of the notice proceed on a mere change of opinion and   therefore would be completely without jurisdiction.

Accordingly, the Hon’ble High Court had quashed and set-aside the notice.

The Hon’ble Supreme Court while passing the judgment stated that there was no reason to interfere in the matter.

Download Full Judgment Click Here >>

• Penalty u/s 271B for unfilled column 40 in Tax Audit Report Form 3CD deleted by ITAT
• Merely ex-parte rectifying computation without amending assessment order not make it nullity- ITAT
• Once assessee discharges primary onus, it shifts to AO to bring evidence to contrary – ITAT
• Cost Inflation Index for FY/Tax Year 2026-27 notified by CBDT. See Up-to-date Table of CII
• Power of CIT(A) u/s 251(1)(a) to remand case can be exercised only in best judgment assessment