Shah Rukh Khan vs DCIT central circle 4 (2) [ITA No. 6312/MUM/2024]
Background of the Case
The Appellant, Shah Rukh Khan, filed his income tax return for the assessment year 2012-13, declaring a total income of Rs. 83,42,22,630. The return was selected for scrutiny, and an assessment order was passed under Section 143(3) of the Act, determining the total income at Rs. 84,17,99,923.
Reopening of Assessment
The respondent, AO reopened the assessment, after the expiry of four years from the end of AY 2012-13 and issued the notice under Section 148. The AO alleged that income had escaped assessment due to the improper claim of foreign tax credit under Section 90 of the Act. The AO contended that the assessee had claimed excessive foreign tax credit, leading to underassessment of income.
Arguments by the Appellant
The appellant argued that the reopening was invalid as it was initiated beyond the four year period and there was no failure to disclose material facts. The Appellant emphasized that the reopening was based on a reappraisal of facts already examined during the original assessment and no new or tangible material was brought on record to justify the reopening. The Appellant contended that there was no failure to disclose material facts and that the reassessment was based on a mere “change of opinion.”
ITAT’s Findings and Decision
The ITAT, after examining the facts and legal provisions, quashed the reassessment proceedings and held that the reopening was merely a change of opinion, as the issue of foreign tax credit had already been examined during the original assessment. Reopening on the same issue without fresh material is not permissible under the law.
The ITAT observed that the reopening was based on a reappraisal of facts already considered during the original assessment. There was no new or tangible material to justify the belief that income had escaped assessment. The Tribunal relied on the Supreme Court’s decision in Phool Chand Bajrang Lal v. ITO (1993) 203 ITR 456, which mandates fresh material for reopening.
Shah Rukh Khan vs DCIT central circle
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