Dhiren Anantrai Modi Vs ITO (Bombay High Court)
The petitioner challenged the notice dated 26.03.2019 issued under Section 148 of the Income Tax Act, 1961, the order dated 22.10.2019 rejecting objections to the reopening, and the consequential notice/summons. One of the principal grounds raised was that the Assessing Officer had issued the reopening notice without application of mind.
The High Court examined the recorded reasons and found that they proceeded on the premise that the petitioner’s return for Assessment Year 2012-13 had only been processed under Section 143(1) and that no assessment under Section 143(3) had been made. On that basis, the Assessing Officer invoked clause (b) of Explanation 2 to Section 147.
The Court noted that this factual premise was incorrect. The petitioner’s return filed on 24.09.2012 had in fact been assessed under Section 143(3), and an assessment order had been passed on 31.03.2015. The Court held that the Assessing Officer had proceeded on an erroneous factual basis by recording that the return had merely been processed under Section 143(1), which demonstrated total non-application of mind. The Court also observed that the petitioner’s allegation regarding this incorrect factual basis had not been denied by the Assessing Officer in the affidavit-in-reply, which merely stated that the impugned notice and order were issued for completing reassessment in accordance with the prescribed procedure. The Court held that this ground alone was sufficient to set aside the notice dated 26.03.2019.
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