Jayant Avinash Dave Vs ACIT (Bombay High Court)
The Bombay High Court ruled in favor of petitioner Jayant Avinash Dave, quashing the reopening notice and subsequent assessment and demand orders related to the 2015-16 assessment year. The petitioner challenged the reopening notice under Section 148 of the Income Tax Act, alleging procedural lapses and unfair decision-making. The court observed that the Assessing Officer failed to provide reasons for reopening the case promptly, despite repeated requests, and issued the assessment order in haste, bypassing due process.
The petitioner, a regular taxpayer, had disclosed income of ₹69.68 crore in his original return, which included capital gains. The case was initially scrutinized, and an assessment was finalized with additions in December 2017. However, in March 2021, the department issued a notice for reassessment, citing alleged short-term capital losses used to offset long-term capital gains as a tax-avoidance strategy. The court criticized the department’s handling of the case, particularly the delayed sharing of reasons for reopening and the rushed issuance of orders, which denied the petitioner adequate opportunity to respond. Declaring the process unconstitutional, the court quashed the reopening notice and all subsequent proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. The Rule is made returnable immediately at the request of and with the consent of the learned counsel for the parties.
