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BHARGAV D. KARIA, NIRAL R. MEHTA
Pramukh Export Through Its Prop. Sanjaykumar Gangaram Patel – Appellant
Versus
Income Tax Officer Ward 1, Mehsana Or His Successor – Respondent
JUDGMENT :
Bhargav D. Karia, J.
1. Heard learned advocate Mr. S.N. Divatia for the petitioner and learned advocate Mr. Karan Sanghani for learned advocate Ms. Kalpana K. Raval for the respondent.
2. Having regard to the issue involved in this petition which is in a very narrow compass, with the consent of the learned advocates for the respective parties, the matter is taken up for hearing.
3. Rule returnable forthwith. Learned advocate Mr. Karan Sanghani waives services of notice of rule on behalf of the respondent.
4. By this petition under Article 226 of the Constitution of India, the petitioner has prayed for quashing and setting aside the order dated 29.03.2024 passed under section 148A(d) of the Income Tax Act, 1961 (For short “the Act”) for Assessment Year 2018-2019 as well as notice under section 148 of the Act issued on 29.03.2024 for AY 2018-2019.
5. Brief facts of the case are that the petitioner is a partnership firm which was constituted as per the partnership deed executed on 01.04.2017 to carry on the business of trading of cotton yarn and spare parts of textiles machinery related products.
6. The petitioner filed its e-ITR for Assessment Year 2018-2019 on 17.07.2018 declari
The court emphasized the necessity for the Assessing Officer to apply due diligence and consider all evidence before concluding that income has escaped assessment.
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.
The main legal point established in the judgment is the requirement for the Assessing Officer to consider the material available on record, including the reply filed by the assessee, before deciding ....
Reopening of assessment under section 148 requires new tangible material; reliance on previously considered facts constitutes a change of opinion, which is impermissible.
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.
The court established that the reopening of an assessment under section 148 requires a clear nexus with income escapement, which was not present in this case.
The central legal point established in the judgment is the interpretation of the amended re-assessment scheme introduced by the Finance Act, 2021, and the importance of upholding principles of natura....
The court ruled that the Assessing Officer's notice under Section 148 was invalid as it ignored prior ITAT rulings, establishing no escapement of income for the assessment year in question.
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