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BHARGAV D. KARIA, NIRAL R. MEHTA
Sanjiv Dhireshbhai Shah – Appellant
Versus
Income Tax Officer Circle 1(1)(1) – Respondent
ORDER :
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
[1] By this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice dated 31st March 2021 issued by the respondent – Assessing Officer under Section 148 of the Income Tax Act, 1961 (for short, “the Act”) for reopening of the Assessment Year 2015-16.
[2] The brief facts of the case are as under:
[2.1] The petitioner is an individual and was engaged in the activity of trading in shares and securities. During the year under consideration, the petitioner had also traded in two contracts of “purchase” and “sale” of derivatives of Rs.19,20,000/- each and there was neither any profit nor any loss on account of such transactions. The petitioner filed return of income for the year under consideration on 31st October 2015 declaring total income at Rs.64,40,890/-.
[2.2] Thereafter, the respondent issued the impugned notice dated 31st March 2021 under Section 148 of the Income Tax Act, 1961 (for short, “the Act”) seeking to reopen the case of the petitioner for the year under consideration.
[2.3] The petitioner, in response to the impugned notice, filed return of income on 19th April 2021 and further re
The court emphasized that vague reasons for reopening an assessment do not satisfy the legal requirement for establishing income escapement under Section 148.
Reopening of assessments under the Income Tax Act requires fresh tangible material; reliance on previously examined information constitutes a change of opinion and is invalid.
The court held that an Assessing Officer must form an independent opinion based on material on record before reopening an assessment, and cannot solely rely on external information.
The court established that the reopening of an assessment based on insufficient evidence and without proper jurisdiction constitutes illegal action under the Income Tax Act.
The main legal point established is that the Assessing Officer's belief for the reassessment of income under section 148 of the Income Tax Act is based on subjective satisfaction and the existence of....
The reopening of an assessment under the Income Tax Act requires the Assessing Officer to provide specific reasons linking alleged income escapement to the taxpayer's records, which must not solely r....
Point of law: It is no doubt true that the Court cannot go into the sufficiency or adequacy of the material and substitute its own opinion for that of the Income Tax Officer on the point as to whethe....
Assessing Officer having arrived at his subjective satisfaction based on additional fresh material placed before him that the petitioner had not fully and truly disclosed all the material facts neces....
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