Radhika Roy Vs DCIT (Delhi High Court)
Reopening Quashed with Costs – Delhi HC Slams Department, Imposes ₹1 Lakh Cost per Case for Arbitrary Second Reassessment
The Delhi High Court quashed the second reassessment notices issued under Section 148 for AY 2009-10 against Radhika Roy and Prannoy Roy, holding that the reopening was wholly without jurisdiction and based on a mere change of opinion. In the first reassessment completed under Section 147/143(3) on 30.03.2013, the Assessing Officer had specifically examined the issue of interest-free loans received from RRPR, issued a show-cause notice, called for books and explanations, and consciously chose not to make any addition either as deemed dividend under Section 2(22)(e) or otherwise.
After three years, the department again sought to reopen the same assessment on the very same transaction by proposing to tax the alleged “benefit” of interest-free loan under Section 2(24)(iv), relying on a later complaint and internal records which were already available earlier. The Court held that no new tangible material had emerged and that the foundational facts were fully disclosed and examined in the earlier proceedings. Reopening the case by invoking a different legal provision on the same set of facts amounted to impermissible review and change of opinion.
The allegation that the assessee had failed to disclose material facts was rejected, as the audited balance sheets and loan details were already on record and specifically considered earlier. Invocation of the extended limitation period was held illegal. The Court strongly criticised the repeated reopening as arbitrary, harassing, and destructive of certainty in tax proceedings, holding that reassessment powers cannot be exercised repeatedly merely because a successor officer forms a different view.
Accordingly, the impugned notices and all consequential proceedings were quashed. Taking note of the arbitrary conduct of the department, the Court imposed token costs of ₹1,00,000 in each case payable to the petitioners.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
