Re-Assessment under section 147/148 of the Income Tax Act, 1961 cannot be made merely by re-appreciating the existing circumstances, a division bench of the Delhi High Court said while granting relief to telecom giants Bharti Airtel.
Assessee, Bharti Airtel filed the return for the relevant assessment year which was assessed under the normal provisions of the Income Tax and at book profit of `1,05,53,29,112 under Section 115JB through an order finalized under Section 153 (3).
Subsequently, the Assessing Officer re-opened the above assessment by finding that the claim for software expenses to the tune of `5.44 crores are administrative and other expenditure.
On appeal, both the CIT (A) and the Tribunal deleted the assessment order and held that the reassessment concluded was contrary to the provisions of Section 147/148 as it amounted to change of opinion.
Aggrieved by the appellate orders, the Revenue approached the High Court.
While upholding the ITAT order, the bench comprising Justices Ravindra Bhatt and Sanjeev Sachdeva observed that “the ITAT’s impugned order is unexceptionable because it is premised upon the circumstance that in the absence of any fresh tangible material, it was not open, on mere re-appreciation of the existing circumstances, to reopen the concluded scrutiny assessment.”
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