Re-Assessment for second time without Notice is Invalid: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Chennai bench has held that the assessment cannot be re-opened for the second time without issuing a re-assessment notice under section 148 of the Income Tax Act, 1961.

In the instant case, the Assessing Officer reopened the assessment by issuing notice under Section 148 of the Act on 03.10.2013. The first reassessment, after reopening of assessment on the basis of the notice issued on 03.10.2013, was completed by an order dated 31.03.2015. On the very same day, i.e. on 31.03.2015, the Assessing Officer reopened the assessment for the second time.

Before the Tribunal, the appellants contended that when the assessment was reopened by issuing notice under Section 148 of the Act on 03.10.2013 and it was pertaining to the income which escaped assessment, the Assessing Officer cannot reopen the assessment once again. It was contended that no fresh material was available on record for the purpose of reopening the assessment for the second time. According to them, the Assessing Officer cannot exercise his authority without any fresh material on record, therefore, reopening of assessment is invalid.

The Tribunal observed that when the assessment was reopened by issuing notice under Section 148 of the Act 03.10.2013, the Assessing Officer could have brought to taxation all the income which escaped assessment. Therefore, there is no justification for the Assessing Officer to issue a notice once again when the first reassessment proceeding was pending.

“This Tribunal is of the considered opinion that reopening of assessment for the second time on the day on which the first reassessment was completed on 31.03.2015 is bad in law. Even if there was escapement of income, this Tribunal is of the considered opinion that the Assessing Officer ought to have brought to taxation on the basis of the notice issued on 03.10.2013 under Section 148 of the Act. Therefore, reopening of assessment by issuing another notice on 31.03.2015 is not justified. Hence, this Tribunal is unable to uphold the orders of the authorities below. Accordingly, the orders of the authorities below are set aside and the consequential order passed by the Assessing Officer is quashed,” the Tribunal said.