Case Law Details
Shrenik Sudhir Vimawala Vs ACIT (Gujarat High Court)
In a significant judgment, the Gujarat High Court has quashed the order under clause (d) of Section 148A and the notice issued under Section 148 of the Income Tax Act, 1961, in the case of Shrenik Sudhir Vimawala Vs ACIT. This decision underscores the imperative of the Assessing Officer (AO) to duly consider the objections of the assessee before proceeding with reassessment notices for the Assessment Year (AY) 2018-19.
The case revolved around the AO’s intention to reopen the assessment for AY 2018-19, based on alleged non-disclosure of transactions connected with the Social Cooperative Bank Ltd. and Union Bank of India. The AO claimed an escapement of income amounting to Rs.1,80,41,71,133. The assessee, however, filed detailed objections under clause (b) of Section 148A, disputing the AO’s allegations and providing substantial documentary evidence to support his claims.
Despite the assessee’s objections, the AO issued a final order under clause (d) of Section 148A, asserting that the submissions were not acceptable without providing a detailed examination of the assessee’s objections. This act by the AO was challenged in the Gujarat High Court under Article 226 of the Constitution of India.
The High Court noted that the AO had failed to consider the assessee’s objections in their true sense, which is a statutory obligation under Section 148A of the Income Tax Act. The Court emphasized that the process of considering the assessee’s objections is not a mere formality but a quasi-judicial function that requires proper application of mind and reasoning.
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