In a significant ruling, the Kerala High Court in Apollo Tyres Ltd. vs. Assistant Commissioner of Income-Tax (ITA No. 42 of 2024; reported at 2025 LiveLaw (Ker) 660) clarified that non-production of Form 3CL—a report issued by the Department of Scientific and Industrial Research (DSIR)—cannot be treated as material suppression or failure to disclose facts sufficient to reopen an assessment under Section 147 of the Income Tax Act, 1961.
The Court emphasized that reopening assessments merely because Form 3CL was not available or submitted during the original proceedings amounts to a “change of opinion,” which is impermissible in law.
Case Details:
- Case Title: Apollo Tyres Ltd. vs. Assistant Commissioner of Income-Tax
- Court: Kerala High Court
- Case No.: ITA No. 42 of 2024
- Citation: 2025 LiveLaw (Ker) 660
- Date of Judgment: October 2025
- Coram: Hon’ble Justice Dinesh Kumar Singh and Hon’ble Justice C. S. Dias
- Relevant Provisions: Section 35(2AB), Section 147, Section 148 of the Income Tax Act, 1961
Facts of the Case:
Apollo Tyres Ltd. had claimed weighted deduction for in-house R&D expenditure under Section 35(2AB). During the original scrutiny assessment, the company submitted all relevant documents, including the DSIR approval of its R&D facility. However, the Form 3CL, which certifies the quantum of expenditure approved by DSIR, had not yet been issued.
Subsequently, the Assessing Officer initiated reassessment proceedings under Section 147, alleging that the assessee failed to disclose fully and truly all material facts because Form 3CL was not furnished.
Key Issue:
Whether the non-production of Form 3CL amounts to material suppression of facts, justifying the reopening of assessment under Section 147.
Court’s Observations:
- The High Court noted that Form 3CL is issued by the DSIR and its issuance is not within the control of the assessee.
- The assessee had disclosed all material facts necessary for the assessment, including DSIR approval and R&D details.
- The Court observed that reopening based solely on the non-production of Form 3CL does not satisfy the conditions under Section 147 and would merely constitute a change of opinion on facts already examined.
- The Court reiterated that once an assessment is completed after full disclosure, the Assessing Officer cannot reopen the case merely because of a later-received procedural document.
Judgment:
The Kerala High Court quashed the reassessment notice and proceedings, holding that the absence of Form 3CL cannot be construed as non-disclosure or suppression of material facts. The decision reinforces that Section 147 cannot be invoked for a mere procedural lapse or departmental delay.
Key Takeaway:
Reassessment under Section 147 must be based on tangible new material facts, not on mere procedural non-compliance like the delayed or non-production of Form 3CL. This ruling protects taxpayers from unnecessary reassessments and underscores the principle that change of opinion is not a valid ground for reopening.