The assessee, a Hindu Undivided Family, preferred an appeal against the order passed by the National Faceless Appeal Centre for Assessment Year 2014-15, whereby the addition made in reassessment proceedings under section 147 read with section 144 of the Income-tax Act, 1961 was confirmed.

During the original assessment proceedings, the assessee was called upon to explain the source of investment amounting to ₹58.26 lakh made in shares of Sunrise Asian Limited. In response to multiple statutory notices issued under sections 143(2) and 142(1), the assessee furnished detailed explanations along with confirmations, bank statements, and supporting documentary evidence. After examination of the material on record, the Assessing Officer made an addition of ₹32.85 lakh and, by implication, accepted the balance amount of ₹25.41 lakh as explained. The said addition of ₹32.85 lakh was subsequently deleted by the Commissioner (Appeals), and the Revenue’s further appeal was dismissed by the Tribunal.

Thereafter, the Assessing Officer initiated reassessment proceedings under section 147 by issuing notice under section 148, seeking to tax the balance amount of ₹25.41 lakh, alleging that the same had escaped assessment. In the reassessment order, the said amount was added to the income of the assessee, and the addition was affirmed by the Commissioner (Appeals).

Upon examination of the record, the Tribunal observed that during the original assessment proceedings, the Assessing Officer had issued detailed notices, conducted inquiries, and examined the very issue relating to the source of investment. The fact that only ₹32.85 lakh was added in the original assessment clearly demonstrated that the remaining amount of ₹25.41 lakh stood accepted as genuine. The Tribunal further noted that all relevant documents and explanations were furnished by the assessee during the original assessment and were duly considered.

In view of these facts, the Tribunal held that reopening the assessment on the same issue amounted to a mere change of opinion, which is impermissible under law. Since the issue had already been examined and consciously accepted in the original assessment, the assumption of jurisdiction under section 147 was held to be invalid.

Accordingly, the Tribunal quashed the notice issued under section 148 as well as the reassessment order passed pursuant thereto. As the reassessment itself was annulled, the Tribunal declined to adjudicate the remaining grounds on merits. The appeal of the assessee was thus allowed.

Source Link- https://itat.gov.in/public/files/upload/1768375550-sgkkup-1-TO.pdf

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