Sanjay Patel Vs ACIT (Bombay High Court)
Bombay High Court dismissed a petition filed by Sanjay Patel challenging an order under Section 148A(d) and a subsequent notice under Section 148 of the Income Tax Act, 1961, both dated March 28, 2024, for the assessment year 2017-18. The court declined to exercise its extraordinary jurisdiction, primarily due to the petitioner’s failure to provide complete and necessary documents to substantiate his claims.
The petitioner had filed his income tax return for the relevant assessment year, which was selected for scrutiny concerning a deduction claimed under Section 57 of the Act. During the original assessment proceedings, the petitioner claimed to have submitted evidence supporting the nexus between income from other sources and the claimed deduction. An assessment order under Section 143(3) was subsequently passed, accepting the returned income. However, the court noted that this order did not explicitly refer to the evidence the petitioner claimed to have submitted.
The reopening of the assessment was initiated based on an audit objection stating that there was no documentary evidence or bank statement to prove that the interest expenses were incurred to earn the relevant income. The petitioner was issued a notice under Section 148A(b) seeking his response. The court highlighted that the petitioner failed to file a reply within the stipulated time or seek an extension. A belated reply was sent via email after the deadline, but the attachments referred to in this email were not annexed to the present petition. Similarly, while the petitioner referred to an email submitted during the original assessment proceedings as evidence of the information already being on record, only the acknowledgement of the email, without the crucial attachments, was provided to the court.
The petitioner argued that the reopening amounted to a change of opinion on an issue already examined during the regular assessment, relying on several decisions of the Bombay High Court. However, the court found itself unable to determine whether the issue was indeed examined due to the absence of the supporting documents. The court emphasized that it was incumbent upon the petitioner to provide all relevant annexures and enclosures if he wanted the court to exercise its extraordinary jurisdiction and examine the factual basis of his claim. The failure to do so, coupled with the belated filing of the reply to the show cause notice, weakened the petitioner’s case.
While acknowledging the petitioner’s legal arguments regarding audit objections and change of opinion, the Bombay High Court refrained from ruling on these contentions. The court reasoned that the necessary factual foundation to decide these legal issues was lacking due to the incomplete documentation presented by the petitioner. The court observed that without the complete records of what was submitted during the original assessment and in response to the reopening notice, it could not ascertain whether the issue was already considered. Consequently, the court dismissed the petition, granting the petitioner the liberty to raise the issue of the validity of the reassessment proceedings before the Appellate Authority if an adverse order is passed pursuant to the notice under Section 148 of the Act.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
