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G. S. KULKARNI, SOMASEKHAR SUNDARESAN
Aashish Niranjan Shah – Appellant
Versus
Union of India – Respondent
JUDGEMENT :
Somasekhar Sundaresan J.
1. Rule. With the consent of the parties, taken up for final hearing and disposal.
2. This petition is a challenge to reassessment proceedings initiated in respect of assessment year 2013-14 (“AY-2013-14”). The Petitioner, an individual had filed the relevant tax returns on 27th September, 2013, offering taxable income of Rs.73,08,942/-. The returns were subjected to scrutiny assessment under Section 142(2) of the Income-tax Act, 1961 (“the Act”). The assessment order came to be passed on 11th March, 2016. An addition of Rs.1,14,329/- was made to the returned income. In compliance with the same, the additional tax amount as assessed was paid on 12thApril, 2016.
3. On 31st March, 2021 i.e. seven years after the end of the relevant assessment year, a notice under Section 148 (“Impugned Notice”) was issued to the Petitioner by the Assistant Commissioner of Income-tax, Circle 7 in Pune, Respondent No.2. The sanction for the issuance of the notice under Section 148 had been issued by the Principal Commissioner of Income-tax-4, Pune, Respondent No.3. In response, the Petitioner submitted that he had no change to make to the originally filed returns and th
Reassessment under Section 147 requires proof of failure to disclose material facts during the original assessment, which was not demonstrated in this case.
Reassessment under Section 147 after four years requires proof of failure to disclose material facts, which was not demonstrated in this case.
A defective return cannot be regarded as an invalid return.
The main legal point established in the judgment is that reassessment proceedings must be based on tangible material and cannot be initiated solely on the basis of a 'change of opinion' without fresh....
The judgment established the importance of tangible material and the prohibition of a mere change of opinion in the exercise of power under section 147 of the Income Tax Act.
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.
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