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N. V. ANJARIA, BHARGAV D. KARIA
Shahlon Silk Industries Pvt Ltd. – Appellant
Versus
Assistant Commissioner Of Income Tax, Circle 2(1)(2) – Respondent
JUDGMENT :
BHARGAV D. KARIA, J.
1. Heard learned Senior Advocate Mr. Tushar Hemani with learned advocate Ms. Vaibhavi Parikh and learned advocate Mr. Parimalsinh Parmar for the petitioner and learned advocate Mr. Nikunt Raval for the respondent.
2. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice dated 13.12.2017 issued under section 148 of the Income Tax Act, 1961 (For short “the Act”) for reopening of the assessment proceedings for the Assessment Year 2012-2013.
3. Brief facts of the case are as under :
3.1) The petitioner is a company incorporated under the Companies Act, 1956 and was engaged in the business of manufacturing and trading of yarn and fabric during the assessment year under consideration.
3.2) For the Assessment Year 2012-2013, the petitioner filed return of income on 28.09.2012 declaring total income of Rs.1,58,22,100/- after claiming deduction of Rs. 27,62,980/- in respect of key man insurance premium.
3.3) The assessee company Shahlon Industries Pvt. Ltd merged with the petitioner herein i.e. Shahlon Silk Industries Pvt. Ltd vide order dated 27.08.2014 passed by this Court.
3.4) Case of the petitioner was selected
Reopening of assessment under the Income Tax Act requires tangible new material; mere change of opinion is insufficient.
The main legal point established in the judgment is that the Assessing Officer must have 'tangible material' to form a reason to believe that income has escaped assessment, especially when issuing a ....
Point of Law : Sufficiency of the evidence or material is not open to scrutiny by the Court but the existence of the belief is the sine qua non for a valid 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....
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.
Assessee’s objections raised against the reopening proceedings are not acceptable as the case warrants scrutiny on the same lines. Accordingly, the objections so raised are hereby disposed off accord....
The Assessing Officer must have tangible evidence linking the taxpayer to alleged income escape for valid reassessment under the Income Tax Act; mere suspicion is insufficient.
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