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N. V. ANJARIA, BHARGAV D. KARIA
P. C. Snehal Engineers Private Limited – Appellant
Versus
Assistant Commissioner of Income Tax Circle 3(1)(1) – Respondent
JUDGMENT :
Bhargav D. Karia, J.
1. Heard learned advocate Mr. Manish J. Shah for the petitioner and learned Senior Advocate Mr. M.R. Bhatt for M.R. Bhatt and Co. for the respondent.
2. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice dated 13.03.2018 issued under section 148 of the Income Tax Act, 1961 (For short “the Act”) for reopening of the assessment proceedings for the Assessment Year 2011-2012 and also challenged the order dated 3.10.2018 disposing of the objections raised by the petitioner against the notice for reopening.
3. Brief facts of the case are as under :
3.1 The petitioner is private limited company and is engaged in business of construction and engineering.
3.2 For the Assessment Year 2011-2012, the petitioner submitted e-return of income declaring total income of Rs.2,61,86,720/-.
3.3 The petitioner received a notice under section 142(1) of the Act dated 3.12.2012 calling for certain details which included details of scrutiny assessments of last three years and whether the petitioner is in appeal against the
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.
Reopening of assessment under the Income Tax Act requires tangible new material; mere change of opinion is insufficient.
The key legal principle established in the judgment is that the notice for reopening the assessment under Section 148 of the Income-Tax Act, 1961 must be based on fresh tangible material, and reopeni....
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.
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.
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....
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.
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