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DHIRAJ SINGH THAKUR, VALMIKI SA MENEZES
Milton Plastics Limited – Appellant
Versus
Mudit Nagpal, Deputy Commissioner of Income-tax, Circle 2(2) – Respondent
JUDGMENT :
VALMIKI SA MENEZES, J.
By this writ petition invoking our jurisdiction under Article 226 of the Constitution of India, the Petitioner impugns Notice dated 22.03.2004 issued by the Respondent No.1 - Deputy Commissioner of Income Tax, Circle 2(2), Mumbai, under Section 148 of the Income Tax Act, 1961 (hereinafter referred as “the Act”) alongwith order dated 04.03.2005 dismissing the Petitioner’s objections to reopening of assessment for the Assessment Year 1997-98.
2. Rule. By consent of the parties, Rule is made returnable forthwith and the petition is heard finally.
3. The primary contentions raised in the writ petition are stated as under :
Reopening of assessment under the Income Tax Act requires tangible new material; mere change of opinion is insufficient.
Reopening of assessment under the Income Tax Act after four years is impermissible without failure to disclose material facts; mere change of opinion does not justify such action.
Reopening of assessment beyond four years without fresh tangible material or proper disposal of objections is illegal under the Income Tax Act.
Point of Law : Power to reopen an assessment must be conditioned on the existence of “tangible material” and that “reasons must have a live link with the formation of the belief”.
The court emphasized the need for tangible material to believe that income had escaped assessment and held that the power to grant approval for re-opening an assessment is coupled with a duty and can....
One of the purposes of S. 147, appears to us to be, to ensure that a party cannot get away by wilfully making a false or untrue statement at the time of original assessment and when that falsity come....
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