Bennett Coleman & Company Limited Vs DCIT (Bombay High Court)
In Bennett Coleman & Company Limited v. DCIT, the Bombay High Court examined the legality of reopening assessments under Section 148 of the Income Tax Act. Bennett Coleman, engaged in diverse businesses including publishing and broadcasting, had demerged its English news channel Times Now from its subsidiary, Times Global Broadcasting Company Limited, into itself. During the 2015-16 assessment year, the company carried forward business losses and unabsorbed depreciation from the demerged entity under Section 72A(4). The Assessing Officer initially accepted this claim but later issued a notice for reopening the assessment, citing potential underassessment based on an audit objection.
The court highlighted that the reopening of the assessment relied solely on the audit objection rather than the Assessing Officer’s independent reasoning. Citing precedents, the court ruled that reopening assessments based on external directions without forming an independent belief is impermissible under the law. It observed that Bennett Coleman had disclosed all necessary facts during the original assessment, and the subsequent reopening lacked jurisdictional validity. This case reinforces the principle that the Assessing Officer must independently evaluate and believe that income has escaped assessment before issuing a reopening notice.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
