Dominion Diamond (India) Private Limited Vs ACIT (Bombay High Court)
Bombay High Court dealt with a writ petition filed by Dominion Diamond (India) Private Limited challenging (i) a notice issued under Section 148 of the Income Tax Act, 1961, dated 31 March 2021; (ii) orders dated 3 March 2022 and 8 March 2023 rejecting the assessee’s objections to reopening; and (iii) the assessment order dated 31 March 2022. The Court had earlier, on 4 May 2022, granted ad-interim relief staying all these actions and restraining the tax authorities from “taking any further steps” pending final disposal of the petition. This stay order continued to remain in effect.
Despite this, the Assessing Officer (AO) proceeded to treat the Section 148 notice as a show-cause notice under Section 148A(b), relying on the Supreme Court’s decision in Union of India & Others v. Ashish Agarwal (444 ITR 1). The AO argued that since the notice dated 31 March 2021 was served on 1 April 2021, it fell under the new reassessment regime effective from that date. Based on this reasoning, the AO passed an order under Section 148A(d) rejecting the assessee’s objections, even though the High Court’s stay order explicitly restrained the authorities from proceeding further.
