Reassessment only because of difference in opinion of valuation as adopted by assessee is untenable

Lakshdeep Investments & Finance Pvt. Ltd Vs ACIT (Bombay High Court)

Bombay High Court held that only reason for re-assessment proceedings under section 148 of the Income Tax Act is adoption of different opinion on the question of valuation as against the one adopted by petitioner. Accordingly, such re-assessment proceedings is liable to be quashed and set aside.

Facts- This writ petition invokes our jurisdiction under Article 226 of the Constitution of India challenging the legality and validity of the notice dated 30/03/2021 issued by respondent No.1 under Section 148 of the Income Tax Act, 1961 (“the Act”) and order dated 04/03/2022 rejecting the objections of the petitioner to the aforementioned notice. The impugned notice relates to Assessment Year 2015-2016 for the previous year ending on 31/03/2015.

Conclusion- In fact, the order rejecting the objections has not even once adverted to the valuation report submitted by the petitioner during the earlier assessment proceedings after scrutiny, nor does it refer to the method used by the petitioner for valuation. It therefore appears that the only reason and purpose for issuing the impugned notice u/s. 148 appears to be that AO has come to a different opinion on the question of valuation from one adopted by the petitioner, which has been accepted in the earlier assessment order dated 19/12/2017.

Held that the impugned notice dated 30/03/2021 issued under Section 148 of the Act is without jurisdiction and is barred by limitation; consequently, the impugned order dated 04/03/2022 which dismisses the objections of the petitioner, is also quashed and set aside.

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