Harikishan Sunderlal Virmani Vs DCIT (Gujarat High Court)
Gujarat High Court has quashed a reassessment notice issued by the Deputy Commissioner of Income Tax (DCIT) against Harikishan Sunderlal Virmani for the Assessment Year 2009-2010. The court found that the re-opening of the assessment, initiated beyond the four-year statutory period, lacked evidence of the assessee’s failure to fully disclose material facts and was based on “borrowed satisfaction” rather than an independent opinion formed by the Assessing Officer (AO).
The case, Harikishan Sunderlal Virmani Vs DCIT, stemmed from a notice issued under Section 148 of the Income Tax Act, 1961, seeking to reopen an assessment that had previously been completed under Section 143(3) of the Act.
Background of the Case:
Mr. Virmani had filed his income tax return for AY 2009-2010 on September 30, 2010, declaring an income of Rs. 2,09,39,600/-, later revised to Rs. 2,23,30,910/-. This return was selected for scrutiny, and after a thorough assessment process, an order under Section 143(3) was passed on November 30, 2010.
However, on March 31, 2016, the assessee received a notice under Section 148, alleging that income chargeable to tax had escaped assessment. This notice was issued nearly six years after the original assessment order, well beyond the standard four-year period.
