CNB Finwiz Ltd. Vs DCIT (Delhi High Court)
Delhi High Court held that concluded and closed assessments cannot be reopened merely on suspicion. Accordingly, reopening of assessment is liable to be quashed since there is no tangible material that has a live nexus to reason to believe that the income has escaped assessment.
Facts- The petitioner is a company incorporated under the Companies Act, 1956 and is engaged in the business of trading in shares, securities, equity and currency derivatives, mutual funds, and providing DP Services. The petitioner has filed the present petition under Article 226 of the Constitution of India, inter alia, impugning a notice dated 31.03.2018 issued by the respondent u/s. 148 of the Income Tax Act, 1961.
The petitioner, essentially, challenges the jurisdiction of the AO to commence the reassessment proceedings in respect of AY 2011-12, inter alia, on the ground that the AO did not have any reason to believe that the petitioner’s income for AY 2011-12 had escaped assessment. It is the petitioner’s case that the impugned notice has been issued based on surmises and suspicion, and not on the basis of any tangible material, which would furnish any reason to believe that the petitioner’s income for AY 2011-12 had escaped assessment.
