Case Law Details
Mohanlal Champalal Jain Vs ITO (Bombay High Court)
Assessing Officer has proceeded on wrong premise that even when called upon to state why the petitioner had not filed return of income, he had not responded to the said query. The petitioner did communicate to the Department that he had no taxable income and therefore, there was no requirement to file the return. The Assessing Officer did not carry out any further inquiry before issuing the impugned notice. In the reasons, one more error pointed out by the petitioner is that the Assessing Officer referred to the sum of Rs. 18.82 crore as total transaction in the commodities. In the petition as well as in the objections raised before the Assessing Officer, the petitioner pointed out that his sales were to the tune of Rs. 16.82 crore against purchases of 16.84 crore and thereby, he had actually suffered a loss. The Assessing Officer has not discarded these assertions. Importantly, if the Assessing Officer had access to the petitioner’s sales in commodities, he could as well have gathered the information of his purchases. Either on his own or by calling upon the petitioner to provide such details, the Assessing Officer could and ought to have verified at least prima facie that the income in the hands of the petitioner chargeable to tax had escaped assessment. In the present case, what the Assessing Officer aiming to do so is to carry out fishing inquiry. In fact, even when the assessee brought such facts and figures to his notice, the Assessing Officer refused to look into it.
We are conscious that the petitioner not having filed return of income and consequently there being no scrutiny assessment, the Assessing Officer would have much wider latitude to reopen the assessment. However, in such a case also, the primary requirement of the Assessing Officer having a reason to believe that the income chargeable to tax had escaped assessment would apply.
FULL TEXT OF THE HIGH COURT ORDER / JUDGEMENT
1. The petitioner has challenged a notice of reopening of assessment dated 28.3.2018 issued by respondent No. 1 -Income Tax Officer.
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