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M. S. KARNIK, VALMIKI MENEZES
Dilip Laximan Powar – Appellant
Versus
Income Tax Officer, Panaji – Respondent
JUDGMENT :
M.S. KARNIK, J.
1. Heard Mr. Sahish Mahambrey for the petitioner and Ms Amira Razak, learned Standing Counsel for the respondent.
2. This petition, under Articles 226 and 227 of the Constitution of India, challenges a notice dated 19.03.2024 under Section 148-A of the Income Tax Act, 1961 (said Act for short). The facts of the case in brief are as follows.
3. The petitioner is paralysed and therefore represented by his wife. The petitioner is running the business of Hardware and Paint (Retail) which is a proprietorship firm in the name and style of Dilip Traders at Naikwado, Calangute, Goa. The petitioner has been filing his income tax returns and paying the necessary tax for more than ten years. The petitioner along with his wife filed returns for the Assessment Year 2017-18. A notice under Section 142(1) and Section 129 of the said Act was issued to the petitioner and upon necessary explanation given by the petitioner and after due verification the assessment was completed by accepting the income return filed by the petitioner vide Assessment Order dated 31.12.2019 passed under Section 143(3) of the said Act.
4. The petitioner received notice dated 19.03.2024 under Section
Reopening of income tax assessments requires new information, not merely a change of opinion, to avoid arbitrary exercise of power.
Under section 147 of the Act the proceedings for the reassessment can be initiated only if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any....
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 Section 148 is invalid if based on materials already available during the original assessment, constituting a mere change of opinion without fresh evidence.
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....
The court upheld the authority of the Assessing Officer to reassess income under amended provisions of the Income Tax Act, reinforcing that objections can be addressed during reassessment proceedings....
Reopening of income tax assessments requires new tangible material; mere change of opinion is insufficient.
The court established that reopening assessments requires a clear and valid reason to believe that income has escaped assessment, which was not present in this case.
The notice issued under Section 148A(b) of the Income Tax Act was invalid due to procedural errors, lacking necessary information on escaped income and failing to follow required inquiry protocols.
A notice under Section 148 of the Income Tax Act is invalid if issued beyond the limitation period and based on previously available information, constituting a change of opinion.
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