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MUNNURI LAXMAN, PUSHPENDRA SINGH BHATI
Shiv Lal Soni, S/o. Shri Shankar Lal Soni – Appellant
Versus
Union Of India through The Chief Commissioner of Income Tax – Respondent
ORDER :
(Munnuri Laxman, J.) :
1) The present writ petition has been filed challenging the notice dated 26.03.2015 issued under Section 147 read with Section 148 of the Income Tax Act, 1961 and notice dated 04.08.2015 issued under Section 143(2) of the Income Tax Act, 1961.
2) The case of the writ petitioner is that the petitioner is an assessee with the Income Tax Department and he filed Income Tax Return for the assessment year 2008-2009 on 31.03.2009 declaring interest income of Rs.2,09,636/- and income from agriculture of Rs.95,563/- showing no income under the head ‘Capital Gain’. Subsequently, he realised bona fide mistake in the return with regard to capital gain and he filed an amended return disclosing the capital gains of Rs.33,52,753 claiming deduction of Rs.2,50,000/- under Section 54-F of the Income Tax Act, 1961 (herein after referred to as ‘the Act’) in the course of assessment proceedings and an amount of Rs.34,00,000/- was deposited in the FDR under capital gains scheme. The assessee received capital gain of Rs.37,75,099/- as the compensation in the land acquisition proceedings.
3) The Assessment Officer after due enquiry has passed the assessment order dated 07.12.201
Notices for reassessment under the Income Tax Act must be based on new information, not merely a change of opinion, and are subject to a four-year limitation period.
The issuance of notice under Section 148A(b) was barred by limitation, violating the requirement for a reasonable opportunity to respond.
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.
Failure to issue notice under Section 143(2) invalidates the assessment order, as it is a mandatory procedure under the Income Tax Act.
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....
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