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BHARGAV D. KARIA, D. N. RAY
Rameshchandra Purushottamdas Patel – Appellant
Versus
Assistant Commissioner of Income Tax, Circle 1(1)(1) – Respondent
JUDGMENT :
BHARGAV D. KARIA, J.
1. Heard learned advocate Mr. Manish Shah for the petitioner and learned Senior Standing Counsel Mr. Karan Sanghani for the respondent.
2. Learned advocate Mr. Manish J. Shah has tendered the draft amendment. The same is allowed in terms of the draft. To be carried out forthwith.
3. Rule returnable forthwith. Learned Senior Standing Counsel Mr. Karan Sanghani waives service of notice of rule on behalf of the respondent State.
4. Having regard to the controversy involved which is in a narrow compass, with the consent of learned advocates for the respective parties, the petition is taken up for hearing today.
5. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice dated 28.03.2021 issued under section 148 of the Income Tax Act, 1961 (For short “the Act”) for Assessment Year 2016-2017.
6. Brief facts of the case are that the petitioner is an individual and regularly assessed at PAN:AEZPP9756P under the Act.
7. For the Assessment Year 2016-2017, the petitioner filed the original return of income on 29.03.2017 declaring total income of Rs.34,32,466/-.
8. Thereafter, the case of petitioner was selected for scruti
The Assessing Officer cannot reopen an assessment based solely on a change of opinion; valid reasons must exist to believe that income has escaped assessment.
Reopening of assessment under Section 148 requires fresh tangible information and cannot be based on audit objections alone.
The court established that reopening assessments requires new material evidence, and Section 50C does not apply to stock in trade, reinforcing the principle against mere changes of opinion.
Taxation – Assessment/Re assessment - Concept of ‘change of opinion’ as an inbuilt test to check abuse of power by AO. It was further observed that AO has power to reopen assessment proceedings, prov....
Reopening of assessment under Section 148 requires new tangible material; mere change of opinion does not justify reopening.
A notice under Section 148 of the Income Tax Act issued beyond four years without proper examination of material facts is invalid and lacks jurisdiction.
The jurisdiction to re-open an assessment under the Income Tax Act requires tangible material indicating income has escaped assessment, and cannot be based solely on a change of opinion.
Reopening of tax assessments requires clear, specific reasons supported by tangible evidence; vague allegations do not warrant legal action.
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 Assessing Officer cannot reopen an assessment based solely on previously considered material, as this constitutes a mere change of opinion, which is impermissible under the Income Tax Act.
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