Case Law Details
Geopreneur Realty Private Limited Vs Union of India Through the Secretary (Bombay High Court)
The Bombay High Court recently addressed the issue of reopening assessments based on a change of opinion in the case of Geopreneur Realty Private Limited vs. Union of India. The petitioner contested a notice dated March 30, 2021, issued under Section 148 of the Income Tax Act for the Assessment Year 2017-2018.
Background: Geopreneur Realty Private Limited, engaged in real estate development and construction, filed its return of income for the Assessment Year 2018-2019, declaring a total loss of Rs. 1,41,16,482/-. After scrutiny assessment, the order dated December 20, 2019, assessed the loss at Rs. 1,05,42,877/-. Subsequently, on March 30, 2021, the petitioner received a notice under Section 148 for the Assessment Year 2017-2018, alleging that income had escaped assessment.
Reasons for Reopening: The reasons provided for reopening the assessment highlighted the outstanding borrowings, delay in project commencement, and debiting financial costs. The Assessing Officer proposed disallowing financial costs of Rs. 5,67,95,525/-, leading to a belief that income to the tune of this amount had escaped assessment.
Argument of the Petitioner: Ms. Anchlia, representing the petitioner, contended that since the issues raised during reopening were discussed in the assessment proceedings, the notice based on a change of opinion was unjustified. The petitioner’s response to queries raised during the original assessment was considered as proof that the matter was under the Assessing Officer’s active consideration.
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