ITO Vs Amitkumar Chandulal Rajani (Supreme Court of India)
The dispute culminated before the Supreme Court of India after the Revenue challenged a judgment of the Gujarat High Court that had quashed reassessment notices issued under Section 148 of the Income-tax Act, 1961. The Supreme Court, exercising jurisdiction under Article 136 of the Constitution, condoned the delay but declined to interfere with the High Court’s judgment, thereby dismissing the special leave petition.
Read Gujarat HC Judgment in above case: Gujarat HC Quashed Reassessment for Non-Application of Mind in Reopening Notices
Before the High Court, the assessee had challenged notices dated 30 March 2021 issued for reopening assessments for Assessment Years 2013–14, 2014–15 and 2015–16. The reassessment notices were based on information allegedly received from the DCIT, Central Circle, Rajkot, following survey and search actions conducted in September 2014 in the case of M/s National Shroff & Company. The reasons recorded by the Assessing Officer stated that the assessee had not filed returns of income for certain years and had carried out transactions through the said entity, resulting in unexplained income alleged to have escaped assessment.
The assessee contended that the reasons recorded were factually incorrect, as returns had in fact been filed for all relevant assessment years. It was further argued that no tangible material had been provided to establish a link between the assessee and the alleged transactions, and that the reassessment notices were based on borrowed satisfaction, mechanical recording of reasons, and non-application of mind. Despite requests, the Department did not furnish copies of incriminating material or statements relied upon, asserting confidentiality.
