Genesys International Corp. Ltd. Vs ACIT (Bombay High Court)
Bombay High Court has quashed a Section 148 notice issued by the Income-tax Department to Genesys International Corp. Ltd. for Assessment Year 2015-16, ruling that the reopening of the assessment was based on a “mere change of opinion” and that the taxpayer had made complete disclosures during the original assessment.
Genesys International Corp. Ltd. had filed its income tax return for AY 2015-16 on November 30, 2015. The original assessment was completed under Section 143(3) on December 20, 2017, after the Assessing Officer (AO) issued a Section 142(1) notice and considered the petitioner’s detailed reply.
Reopening Notice and Objections
More than four years after the end of the relevant assessment year, on March 30, 2021, the AO issued a notice under Section 148 to reopen the assessment. The reasons for reopening, furnished on May 20, 2021, primarily concerned the deduction claimed under Section 10AA of the Income-tax Act. The AO’s reasoning indicated that the profits of a unit eligible for Section 10AA deduction should have been set off against losses from ineligible units before computing the available deduction, citing CBDT Circular No. 7/DV/2013 dated July 16, 2013. This, according to the AO, resulted in an under-assessment of Rs. 1,45,38,400/-, attributable to the assessee’s alleged failure to disclose fully and truly all material facts.
