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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BHARGAV D. KARIA, PRANAV TRIVEDI
Siddhi Corporation – Appellant
Versus
Deputy Commissioner Of Income Tax Circle - 3(1)(1) Ahmedabad – Respondent
| Table of Content |
|---|
| 1. overview of petition and income tax assessment details. (Para 4 , 5) |
| 2. arguments regarding reopening of assessments based on alleged transactions. (Para 7 , 8) |
| 3. court observations on inadequacy of evidence for assessment reopening. (Para 10 , 11 , 13) |
| 4. legal standards for assessment reopening and independent authority. (Para 12 , 14) |
| 5. conclusion quashing the assessment notice. (Para 16) |
JUDGMENT :
BHARGAV D. KARIA, J.
1. Heard learned advocate Mr. B.S. Soparkar for the petitioner and learned Senior Standing Counsel Ms. Maithili Mehta for the respondent.
2. Having regard to the controversy involved in this petition in narrow compass, with consent of learned advocates, the matter is taken up for hearing.
3. Rule returnable forthwith. Learned Senior Standing Counsel Ms. Maithili Mehta waives service of notice of rule for respondent.
4. By this petition under Article 226 of the Constitution of India, the petitioner has prayed for quashing and setting aside the notice under Section 148 of the Income Tax Act, 1961 (for short ‘the Act’) dated 20.4.2021 and the order under Section 148A(d) of the Act dated 20.8.2022 and the notice under Section 148 of the Act dated 23.8.2022
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.
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.
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....
Under section 147 of the Act the proceedings for the reassessment can be initiated only if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any....
Point of Law : Formation of belief by the Assessing Officer at the stage of initiation of action under section 147 of the Act is within the realm of subjective satisfaction.
It is settled law that, at the stage of Section 148 of the Act, what is required is “reason to believe”, but not the established fact of escapement of income. This aspect has been considered by the A....
It is a settled position of law that reopening of case under Section 147 of the act, after expiry of 4 years, cannot be justified unless the income chargeable to tax has escaped assessment by reason ....
At the time of recording the reason for satisfaction of AO, there should be prima facie some material on the basis of which, the department could reopen the case. The sufficiency or correctness of th....
The Assessing Officer must independently verify information before reopening assessments; reliance on third-party information without application of mind invalidates the reopening process.
Information furnished at the time of original assessment, when by subsequent information received from the Principal Director (Investigation), itself found to be controverted, the objection to the no....
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