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2024 Supreme(Bom) 438
IN THE HIGH COURT OF BOMBAY
Neela Gokhale, K.R. Shriram, JJ.
Hexaware Technologies Limited - Appellant
Versus
Assistant Commissioner of Income Tax - Respondent
Writ Petition No.1778 of 2023
Decided On : 03-05-2024
Important Points
Subject
Taxation - Income Tax
Act Referred
FINANCE ACT: S.12
INCOME TAX ACT: S.143(2), S.143(3), S.144(b), S.147, S.148, S.148(a), S.148(a)(b), S.148(a)(d), S.149, S.149(1)(a), S.149(1)(b), S.151, S.151(a), S.153(c), S.292(b), S.297(2)(d)(i), S.80(jj)(aa), S.10(aa), S.119, S.119(1), S.142(1)
RELAXATION ACT: S.3, S.3(1), S.4
Headnote
(B) Reopening of assessment - Change of opinion - Authorities cannot reopen based on previously considered information - Deductions consistently allowed in past years; reassessment cited invalid. (Paras 6, 24, 32)
(C) Validity of proceedings and jurisdiction - JAO lacks authority to issue notice; must follow mandatory faceless processing scheme set by CBDT. (Paras 10, 40)
Mr. J.D. Mistri, Senior Advocate a/w. Mr. Madhur Agrawal i/b. Mr. Atul K. Jasani for the Petitioner; Ms. Swapna Gokhale a/w. Mr. Suresh Kumar, Mr. Akhileshwar Sharma, Ms. Samiksha Kanani and Ms. Dhanalaxmi Iyer, for the Respondent.
| Table of Content |
|---|
| 1. the proceedings were expedited by mutual consent of involved parties. (Para 1 , 2) |
| 2. petitioner's engagement and income declaration. (Para 3 , 4 , 5) |
| 3. details of scrutiny notices and assessment. (Para 7 , 8) |
| 4. objections raised against reopening. (Para 9 , 10 , 11 , 12) |
| 5. validity of notices and procedural adherence. (Para 15 , 16 , 18 , 19) |
| 6. issues of limitation and procedural compliance. (Para 20 , 21 , 22) |
| 7. implications of previous judgments. (Para 23 , 24 , 25) |
| 8. explanation of statutory provisions. (Para 26 , 27 , 28 , 29 , 30) |
| 9. analysis of the notice validity based on din. (Para 31 , 32 , 33) |
| 10. scheme applicability and interpretation. (Para 34 , 35 , 36 , 37 , 38) |
| 11. change of opinion and review prohibition. (Para 39 , 40 , 41 , 42) |
| 12. approval validity and application of mind. (Para 43 , 44 , 45 , 46) |
| 13. final ruling of cases. (Para 47 , 48) |
JUDGMENT
K.R. Shriram, J. - Since the pleadings are completed, by consent of the parties, we decided to dispose the petition at the admission stage itself.
2. Therefore, Rule. Rule made returnable forthwith.
3. Petitioner is engaged in information technology consulting, software development and business process services. Respondent no.1 is the Assistant Commissioner of Income Tax and Jurisdictional Assessing Officer (JAO) of petitioner, respondent no.2 is the Principal Commissioner of Income Tax, respondent no.3 is the Principal Chief Commissioner of Income Tax, respondent no.4 is the Central Board of Direct Taxes and respondent no.5 is the Union of India.
4. Petitioner filed return of income for Assessment Year 2015- 2016 on 28th November 2015 declaring total income of Rs.204,54,44,990/-. In the return of income, petitioner claimed deduction under Section 10AA of the Act of Rs.195,94,62,306/- and also claimed deduction under Section 80JJAA of the Act of Rs.6,54,04,038/-. For claiming such deductions, petitioner filed an audit report in Form No.56F and Form No.10DA. Further, the details of deduction claimed under Section 10AA and 80JJAA of the Act was also reported in the Tax Audit report in Form 3CB read with Form 3CD which was submitted to respondent no.1 also during the course of assessment proceedings.
5. Petitioner's case was selected for scrutiny and notice dated 17th June 2016 under Section 143(2) of the Act came to be issued. Respondent no.1 also issued a notice dated 22nd August 2017 under Section 142(1) of the Act. This was followed by another notice dated 5th October 2017 calling upon petitioner to file details of deduction claimed under Chapter VIA alongwith all supporting documents. By its letter dated 13th November 2017 petitioner submitted details of deduction claimed under Chapter VIA of the Act alongwith all supporting documents. Petitioner further filed computation of income and provided reference to disclosures in Form 3CD with respect to the deductions claimed by petitioner. Further submissions were filed during the assessment proceedings. Respondent no.1, thereafter passed an assessment order dated 30th November 2017 under Section 143(3) of the Act accepting the return of income filed by petitioner.
6 .Almost 3 1/2 years later, respondent no.1 issued a notice dated 8th April 2021 under Section 148 of the Act stating that he had reason to believe that income chargeable to tax for Assessment Year 2015-2016 has escaped assessment within the meaning of Section 147 of the Act. Petitioner was also provided a copy of the reasons recorded.
Petitioner, thereafter filed a writ petition being Writ Petition No.3179 of 2021 challenging the notice issued under Section 148 of the Act on the ground that the said notice has been issued on the basis of the provisions which have ceased to exist and are no longer in the statute. The petition was allowed on 29th March 2022 and the Court held that the notice dated 8th April 2021 was invalid.
7. On a Special Leave Petition that the Revenue had filed in the case of Union of India & Ors. vs. Ashish Agarwal, (2022) 444 ITR
