Case Law Details
The Tinplate Company of India Ltd Vs DCIT (Calcutta High Court)
Introduction: The Calcutta High Court recently delivered a significant judgment in the case of The Tinplate Company of India Ltd Vs DCIT, challenging the legality of a notice under Section 148 of the Income Tax Act, 1961. The court held that the notice and proceedings under Section 147 are not sustainable, primarily due to a perceived change of opinion by the assessing officer.
Detailed Analysis: The court scrutinized the reasons for reopening the assessment, highlighting the assessing officer’s claim that the company had debited an amount to the Profit and Loss Account under “interest” during the relevant financial year. The assessing officer argued that there was an escapement of income due to an inadequate disallowance under Section 36(i)(iii) of the Income-tax Act. However, the court found this reasoning insufficient, emphasizing that it amounted to a mere change of opinion.
The judgment further underscored that the reassessment was initiated after the expiration of four years from the end of the relevant assessment year. The petitioner contended that the notice and proceedings were legally flawed as they did not fulfill the criteria for reopening assessments after this statutory period. The court agreed, noting the absence of evidence showing any failure or omission on the part of the assessee to disclose material facts.
The court referenced precedents, including the Calcutta Club Ltd. case, where a similar stance was taken against reassessment proceedings initiated beyond the four-year limit. It emphasized that the assessing officer failed to establish that there was any new material or that the alleged escapement was due to the assessee’s failure to disclose necessary facts during the original assessment.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
