Case Law Details
B.U. Bhandari Autolines Pvt. Ltd. Vs ACIT (Bombay High Court)
Bombay High Court held that issue of reopening of assessment has to be tested only on the basis of the reasons recorded, which reasons can neither be improved upon nor substituted by an affidavit or oral submissions.
Facts- The Petitioner filed its return of income, which was processed under Section 143(1) of the Income Tax Act, 1961 (“the Act”) for the assessment year 2016-17. The assessing officer subsequently issued a notice under Section 148 of the Act dated 30.03.2021 seeking to reopen the assessment for the assessment year 2016-17 on the ground that income chargeable to tax for the said year had escaped assessment.
Conclusion- In the reasoning recorded, it is not clear as to how M/s Magnum Tradex Pvt. Ltd. is sought to be connected with Rajeev Khushwaha. It has not been alleged in the reasons that M/s Magnum Tradex Pvt. Ltd., with whom the Petitioner made an alleged sale was being run by Rajeev Khushwaha, although, in the reply affidavit, it is stated by the revenue that M/s Magnum Tradex Pvt Ltd, was one of the entities which was floated by Rajeev Khushwaha for the purpose of providing accommodation entries.
It is settled law that the issue of reopening of assessment has to be tested only on the basis of the reasons recorded, which reasons can neither be improved upon nor substituted by an affidavit or oral submissions (First Source Solution Ltd Vs. Asst. CIT). Therefore, the action of the assessing officer for the purpose of reopening of reassessment has to be tested on the basis of reasons recorded by the said officer and cannot, therefore, be improved upon the reply affidavit.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
