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RAJIV SHAKDHER, GIRISH KATHPALIA
Raj Birbal – Appellant
Versus
Assistant Commissioner of Income Tax Circle-61(1) – Respondent
JUDGMENT
Rajiv Shakdher, J. (Oral)
1. This writ petition concerns Assessment Year (AY) 2011-2012.
2. The writ petition is directed against notice dated 31.03.2018 issued under Section 148 of the Income Tax Act, 1961 [in short, "the Act"] and the order dated 01.10.2018 passed by the Assessing Officer (AO), whereby objections preferred by the petitioner, qua the commencement of the reassessment proceeding, were disposed of.
3. Pertinently, Ms Prem Lata Bansal, Senior Advocate and Ms Kavita Jha, Advocate, who appear on behalf of the petitioner, say that the reassessment proceeding triggered against the petitioner for the AY in issue, i.e., AY 2011-12, are completely flawed.
4. Ms Bansal and Ms Jha submit that the reassessment proceeding was triggered based on a Tax Evasion Petition (TEP), with no tangible material made available to the AO for forming an opinion that there was reason to believe that income chargeable to tax has escaped assessment.
5. Furthermore, Ms Bansal and Ms Jha say that the other ground, which has presumably, triggered reassessment proceeding is that certain expenses claimed by the petitioner, on account of salary and other heads, had been disallowed in AY 20
The central legal point established in the judgment is that a reassessment proceeding must be based on sufficient material and income in each assessment year is to be assessed independently.
Reassessment under Section 147 after four years requires proof of failure to disclose material facts, which was not demonstrated in this case.
The court established that under the amended Section 148A of the Income Tax Act, the requirement to record 'reason to believe' has been replaced with a subjective decision-making process, allowing fo....
If an assessing authority forms an opinion during the original assessment proceedings on the basis of material facts and subsequently finds it to be erroneous; it is not a valid reason under the law ....
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....
Point of Law : Court satisfied that there was prima facie material available on record before the assessing officer for issuing a notice for reassessment and the notice under Section 148.
The amended Income Tax Act allows reassessment without prior 'reason to believe', broadening the scope for initiating proceedings based on third-party information.
Mere change of opinion is not a ground for reopening of assessment under Section 147 of the Income Tax Act, 1961.
Reassessment under Section 147 requires proof of failure to disclose material facts during the original assessment, which was not demonstrated in this case.
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