Opinion formed by Deputy Commissioner of Income Tax for reopening of assessment, not amenable to judicial review

The petitioner was the assessee who approached the High Court challenging the notice issued by the Income Tax Department for reopening of assessment on account that some income has escaped assessment. Contention placed by the petitioner before High Court was that reopening of assessment is made without jurisdiction and in the absence of any tangible evidence. Thus, the reopening of the assessment is based on a change of opinion.

The Deputy Commissioner of Income Tax, in clear terms, formed an opinion that the issue involved during the original assessment was disallowance of slump sale and the reasons for reopening of assessment, was to reassess the income of Rs.82,49,045/-, which has escaped assessment being entirely different.

Once the Competent Authority formed an opinion that the issue involved during the original assessment is unconnected with the reasons for reopening of the assessment, then the High Court is expected to be slow in interfering with the reopening of the assessment and the authorities must be provided with the opportunity to conduct further adjudications/inquiry by following the procedures contemplated and by allowing the assessee and the assessee is also at liberty to establish his case concerning the evidence available.

When factually, the Deputy Commissioner of Income Tax formed an opinion by assigning reasons that the issue involved during the original assessment was different from that of the reasons for reopening of assessment, then there is no reason for the High Court to go into further details by conducting a roving inquiry and it is for the Competent Authorities to adjudicate the issues on merits and by allowing the writ petitioner in the manner prescribed under the Statute. No interference in that regard is required by the High Court.

Appearing Counsel/s: Mr.R.Sandeep Bagmar, Mr.A.P.Srinivas