Sai Shirdi Constructions Vs ITO (Bombay High Court)
Bombay High Court, in a ruling concerning Sai Shirdi Constructions versus the Income Tax Officer (ITO), has quashed reassessment notices issued under Section 148 of the Income-Tax Act, 1961, for assessment years (AY) 2008-09 and 2009-10. The court found that the Income Tax Department lacked a valid ‘reason to believe’ that income had escaped assessment, as the disputed amount had already been subjected to tax in a subsequent assessment year.
The case, adjudicated on December 16, 2015, involved two writ petitions challenging the Section 148 notices. Given the commonality of the issues, the court consolidated the matters, with Writ Petition No. 1233 of 2016 for AY 2008-09 serving as the lead case.
The genesis of the dispute lay in information received by the ITO from Dy. CIT 28(3), Mumbai, indicating discrepancies in the assessment of M/s Sai Shirdi Constructions for AY 2011-12. The construction company, involved in a project named “Sai Saaksha,” had its AY 2011-12 assessment completed on March 27, 2014, with a total income computed at ₹9,89,84,780. During these proceedings, it was observed that cash payments for sales related to AY 2008-09, totaling ₹82,16,705, had not been declared by the assessee in their original return for that year.
