PCIT Vs Jyoti Bhatia (Supreme Court of India)
SC Refuses to Interfere Because Tax Department Changed Reasons in Reassessment Proceedings; SC Confirms Reassessment Cannot Continue Because Final Order Introduced New Allegations; SC Dismisses SLP Because Section 148 Reopening Was Based on Changing Opinion; SC Upholds Quashing of Section 148 Notice Because Original Reasons Were Altered Later.
The Supreme Court dismissed the Special Leave Petition filed against the Delhi High Court judgment that had quashed reassessment proceedings initiated under Sections 148A(d) and 148 of the Income Tax Act, 1961 for Assessment Year 2018-19. The Supreme Court condoned the delay, heard counsel for the petitioners, and stated that it was not inclined to interfere with the impugned judgment or order. Consequently, the Special Leave Petition was dismissed and pending applications were disposed of.
Read Delhi HC Judgment in this case: Delhi HC Quashes Reassessment as Income Tax Department Changed Grounds Midway
The Delhi High Court had examined the reassessment proceedings initiated on the basis of a notice under Section 148A(b), which alleged that the assessee had claimed fictitious losses of Rs. 2,53,45,154 in equity and derivatives trading. In response, the assessee filed a detailed reply explaining investments made in JM Equity Hybrid Fund and the dividends earned therefrom, along with supporting documents. However, while passing the order under Section 148A(d), the tax authorities shifted the basis of the allegations and stated that the dividend income arose from sham transactions generated using colourable devices and therefore could not qualify as dividend income.
