Back
BHARGAV D. KARIA, D. N. RAY
Shreem Design LLP – Appellant
Versus
Deputy Commissioner Of Income Tax, Circle 2(1)(1), Ahmedabad – Respondent
JUDGMENT :
Bhargav D. Karia, J.
1. Heard Mr. Hardik Vora, learned advocate for the petitioner and Mr.Varun Patel, learned Senior Standing Counsel for the respondent.
2. Having regard to the controversy involved, which is in narrow compass, with the consent of learned advocates for the respective parties, the matter is taken up for final hearing.
3. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice dated 27th March, 2021 issued by the respondent -Assessing Officer under Section 148 of the Income Tax Act, 1961 (for short “the Act”) for the Assessment Year 2016-17.
4.1 The petitioner is a limited liability partnership firm. The petitioner firm filed its return of income for Assessment Year 2016-17 declaring total income of Rs.46,05,780/- on 30th September, 2016.
4.2 The case of the petitioner was selected for scrutiny and notice under Section 142(1) of the Act was issued on 10.10.2018. The petitioner was called upon to furnish the details of loan outstanding at the beginning of the year, the loans taken during the year including the squared up loans in the prescribed format.
4.3 The petitioner submitted the reply on 10.12.2018 providing
Reopening of assessment under the Income Tax Act based on previously scrutinized issues constitutes a mere change of opinion and is impermissible without new material.
Reopening of assessment under Section 148 is impermissible if based solely on a change of opinion without new material evidence.
Reopening of assessment under the Income Tax Act requires tangible new material; mere change of opinion is insufficient.
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.
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 court emphasized the need for tangible material to believe that income had escaped assessment and held that the power to grant approval for re-opening an assessment is coupled with a duty and can....
The Court should be guided by the reasons recorded for the reassessment and not by the reasons or explanation given by the Assessing Officer at a later stage in respect of the notice of reassessment.....
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.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
