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HIGH COURT OF GUJARAT
BHARGAV D. KARIA, D.N. RAY
Adani Wilmar Limited – Appellant
Versus
Assistant Commissioner of Income Tax – Respondent
JUDGMENT :
(BHARGAV D. KARIA, J.)
1. Heard learned advocate Mr. B. S. Soparkar for the petitioner and learned advocate Ms. Maithili Mehta for the respondent.
2. Rule returnable forthwith. Learned advocate Ms. Maithili Mehta waives service of notice of Rule for the respondent.
3. By these petitions, the petitioner has challenged the notice dated 24.03.2020 issued under Section 148 of the Income Tax Act, 1961 (for short, "the Act" ) by the respondent – Assessing Officer seeking to reopen the completed assessment for the Assessment Year 2013-13 as well as order dated 30.12.2020 disposing off the objections raised by the petitioner against reopening the assessment.
4. The brief facts of the case are that the petitioner is a limited company and is one of the importers and refiners of edible oil in India. Petitioner filed its return of income for the Assessment Year 2013-2014 on 28.11.2013 declaring total income at Rs. Nil and paid tax of Rs. 25,43,81,347/- on Book Profit under section 115JB of the Act calculated at Rs.127,14,14,059/-.
5. The case of the petitioner was selected for scrutiny and the assessment order under section 143(3) of the Act was passed on 21.12.2016 determining the total
Reopening of assessment under Section 148 requires clear, independent reasoning demonstrating income has escaped assessment, which was not satisfied in this case.
The court established that reopening assessments requires a clear and valid reason to believe that income has escaped assessment, which was not present in this case.
The Assessing Officer must establish the jurisdictional requirement for reopening and cannot rely solely on information without verifying if the issue had been disclosed during the original assessmen....
The power to reopen assessments under Section 147 of the IT Act is much wider post-1st April, 1989, but must be based on tangible material and have a live link with the formation of belief.
The Assessing Officer's jurisdiction under section 147 of the Act has to be tested on the basis of the reasons recorded, and the reassessment proceedings cannot be based on a mere change of opinion w....
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....
Reopening of assessment under Section 148 requires valid reasons; mere incorrect information cannot justify such action.
The judgment established the importance of tangible material and the prohibition of a mere change of opinion in the exercise of power under section 147 of the Income Tax Act.
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